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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): JANUARY 29, 1999
R-B RUBBER PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
OREGON 93-0967413
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
904 E. 10TH AVENUE, MCMINNVILLE, OREGON 97128
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: 503-472-4691
(Former name or former address, if changed since last report): N/A
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R-B RUBBER PRODUCTS, INC.
FORM 8-K
INDEX
ITEM DESCRIPTION PAGE
- ---- ----------- ----
Item 2. Acquisition or Disposition of Assets 2
Item 7. Financial Statements and Exhibits 2
Signatures 3
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On January 29, 1999, RB Recycling, Inc., a newly formed, 100 percent owned
subsidiary of R-B Rubber Products, Inc. (collectively, the "Company"),
acquired certain assets related to a tire recovery and processing plant in
Portland, Oregon from Dallas, Texas based Waste Recovery, Inc. ("Waste
Recovery") pursuant to an Agreement for Sale and Purchase of Business
Assets (the "Agreement") dated January 29, 1999. Pursuant to the Agreement,
the total purchase price was $750,000, consisting of $450,000 in cash from
a new five-year note with a commercial bank, $160,000 in cash from the
Company's existing operating line of credit and $140,000 in cash from
existing cash balances. The Company intends to utilize the equipment in its
existing location and is leasing the land from unrelated third parties.
The Company spent a total of $158,403 purchasing raw materials from Waste
Recovery during 1998. There are no other previous relationships between the
Company and Waste Recovery, nor any of the Company's and Waste Recovery's
affiliates, officers or directors.
(b) The Company acquired inventories, vehicles, machinery, equipment, tools,
supplies, furniture, fixtures and other personal property used in the
business of processing tire chips. The Company intends to utilize the
purchased assets in the same capacity.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS
(a) FINANCIAL STATEMENTS OF THE BUSINESS ACQUIRED
Financial statements for Waste Recovery are not required to be filed.
(b) PRO FORMA FINANCIAL INFORMATION
Pro forma financial information for Waste Recovery is not required to be
filed.
(c) EXHIBITS
The exhibits filed as a part of this report are listed below and this list
constitutes the exhibit index.
2.1 Agreement for Sale and Purchase of Business Assets dated
January 29, 1999 by and between Waste Recovery, Inc. and R-B
Rubber Products, Inc.
10.1 Business Loan Agreement, dated January 19, 1999, by and between
KeyBank National Association and R-B Rubber Products, Inc.
10.2 Lease of Real Property dated February 1, 1999 by and between
EEEK Limited Partnership and RB Recycling, Inc.
10.3 Lease of Real Property dated February 1, 1999 by and between
Arlene Glanz and RB Recycling, Inc.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: February 8, 1999 R-B RUBBER PRODUCTS, INC.
By: /S/RONALD L. BOGH
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Ronald L. Bogh
Chairman of the Board and President
(Principal Executive Officer and
Principal Financial and
Accounting Officer)
3
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EXHIBIT 2.1
AGREEMENT FOR SALE AND PURCHASE
OF BUSINESS ASSETS
EFFECTIVE DATE: January 29TH, 1999
PARTIES: Waste Recovery, Inc.
a Texas corporation
309 S. Pearl Expressway
Dallas, Texas 75201 ("Seller")
Fax No. (214) 745-8945
RB Recycling, Inc.
an Oregon corporation
904 E. 10th Avenue
McMinnville, OR 97128 ("Buyer")
Fax No. (503) 434-4455
RECITALS:
A. Seller is engaged in the business of collecting and shredding waste
tires in and around Portland, Oregon for distribution to and further processing
by manufacturers (the "Business").
B. Seller owns and maintains certain vehicles, machinery, tools,
furniture, fixtures, equipment, and supplies; certain leasehold interests,
contract rights, and regulatory permits; and other assets used in connection
with the operation of the Business.
C. Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, certain of the assets used, useful, or intended to be used in the
operation of the Business, under the terms and conditions set forth herein.
AGREEMENT:
ARTICLE I
SALE OF BUSINESS
1.1 ASSETS SOLD. Seller agrees to sell to Buyer and Buyer
agrees to purchase from Seller, free from all liabilities, claims, and
encumbrances, the following assets owned by Seller and used in connection with
the operation of the Business (other than as set forth in EXHIBIT 1.2(F))
("Assets"):
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(a) All vehicles, machinery, equipment, tools, supplies,
furniture, fixtures, and other personal property of Seller
used in the Business, including but not limited to the
property identified in EXHIBIT 1.1(B);
(b) Raw materials and inventory of Seller with respect to the
Business;
(c) The customer accounts, contracts, leases, franchises,
arrangements and commitments listed on EXHIBIT 1.1(C) and no
others;
(d) All goodwill (except for Seller's name), manuals, catalogs,
sales literature, files, records, customer lists, and other
intangible personal property of Seller used or useful in
connection with the operation of the Business except that
intangible personal property that is the subject of the
License Agreement defined below.
1.2 ASSETS EXCLUDED. Excluded from this sale and purchase are the
following assets of Seller:
(a) Cash on hand and the cash deposited by Seller with the Oregon
Department of Environmental Quality;
(b) Business checking, savings, and trust accounts;
(c) Accounts receivable;
(d) Advances to employees and prepaid expenses; and
(f) All other tangible assets not identified in Section 1.1,
certain intangible assets of Seller with respect to the
Business that are the subject of the License Agreement to be
entered into by Buyer and Seller (the "License Agreement"),
and assets specifically excluded by reference on EXHIBIT
1.2(f).
1.3 NO LIABILITIES ASSUMED. Buyer shall assume no obligations or
liabilities of Seller, except as expressly set forth herein. All obligations and
liabilities not assumed by Buyer shall remain with and be the obligation of
Seller.
1.4 PURCHASE PRICE. The purchase price of the Assets ("Purchase Price")
shall be the sum of $ 750,000.00.
1.5 ALLOCATION OF PURCHASE PRICE. At or prior to the closing, Seller
and Buyer shall cooperate with one another in the preparation of an IRS Form
8594 or a comparable document reflecting their allocation of the Purchase Price
among the Assets.
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ARTICLE II
PAYMENT OF PURCHASE PRICE
The Purchase Price of $ 750,000 shall be paid in cash on the closing
date.
ARTICLE III
SELLER'S REPRESENTATIONS, WARRANTIES, AND COVENANTS
3.1 REPRESENTATIONS AND WARRANTIES. Seller makes the following
representations and warranties:
(a) Seller is now and on the closing date will be a corporation
duly organized and validly existing under the laws of the
State of Texas. Seller has all requisite corporate power and
authority to own and operate the Assets and to carry on the
Business as now being conducted.
(b) The execution, delivery, and performance of this Agreement
have been duly authorized and approved by the Board of
Directors of Seller, and this Agreement constitutes a valid
and binding agreement of Seller in accordance with its terms.
(c) Seller holds good and marketable title to the Assets, free and
clear of restrictions on or conditions to transfer or
assignment and free and clear of liens, pledges, charges, or
encumbrances except as noted in EXHIBIT 3.1(c). None of the
Assets are subject to the purchase money security interest of
Les Schwab of Portland Inc., naming Seller as debtor.
(d) Seller has provided to Buyer front and back copies of the
Certificate of Title for each titled vehicle included among
the Assets.
(e) Seller is not aware of any labor dispute or labor trouble
involving employees of Seller engaged in the operation of the
Business and represents that there has not been any such
dispute or trouble during the three years preceding the
effective date of this Agreement.
(f) Seller has no knowledge of any claim, litigation, proceeding,
investigation, or governmental action pending or threatened
against Seller which might result in any material change in
the Business or Assets.
(g) On the closing date, there will be no material leases,
employment contracts, contracts for services or maintenance,
or other similar contracts relating to or connected with the
Assets except as disclosed on EXHIBIT 3.1(g), as assigned to
Buyer, or as listed on EXHIBIT 1.1(c) and assumed by Buyer.
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(h) Seller has validly obtained all material federal, state, and
local environmental permits necessary to conduct the Business.
(i) The processes used in the Business as presently conducted do
not violate or infringe upon any person's patent, trademark,
copyright, or other claim to or right in intellectual
property.
(j) The execution and delivery of this Agreement by Seller and the
consummation of the transaction contemplated hereunder will
not result in the creation or imposition of any valid lien,
charge, or encumbrance on any of the Assets except as
contemplated by this Agreement and will not require the
authorization, consent, or approval of any third party.
(k) Seller has not employed any broker or finder in connection
with the transaction contemplated by this Agreement or taken
any action that would give rise to a valid claim against any
party for a brokerage commission, finder's fee, or other
similar payment.
(l) None of the representations or warranties of Seller expressly
made herein contain any untrue statement of a material fact,
or omit or misstate a material fact necessary in order to make
the statements contained herein not misleading.
(m) All representations and warranties made by Seller shall
survive the closing date, and survive for a period of eighteen
(18) months thereafter, except for the representation set
forth in Section 3.1(c) which shall survive indefinitely.
3.2 GENERAL COVENANTS OF SELLER.
(a) Between the effective date of this Agreement and the closing
date, Seller will:
(i) Operate the Business in the usual and ordinary course
and in substantial conformity with all applicable
laws, ordinances, regulations, rules, and orders and
use its best efforts to preserve the Business and the
continued operation thereof with Seller's customers,
suppliers, and others having relations with Seller;
(ii) Not assign, sell, lease, or otherwise transfer or
dispose of any of the Assets, whether now owned or
hereafter acquired, except in the normal and ordinary
course of business and in connection with the normal
operation of the Business;
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(iii) Maintain the Assets in their present condition,
reasonable wear and tear and ordinary usage excepted;
(iv) Not distribute cash or other property to its
shareholders;
(v) Not pay a bonus to or increase the compensation of
any employee;
(vi) Provide Buyer and its representatives with reasonable
access during business hours to the Assets and the
records of the Business and furnish such additional
information concerning the Business as Buyer from
time to time may reasonably request;
(vii) Comply with all applicable requirements of the Worker
Adjustment Retraining Notification Act, 29 USC
Section 2101, et seq; and
(viii) Exercise its best efforts to effect to consummate the
transaction contemplated by this Agreement and
satisfy all of Seller's obligations under this
Agreement.
(b) Seller shall execute and deliver to Buyer a supply and
services agreement (the "Services Agreement") in substantially
the form attached hereto as EXHIBIT 3.2(B) pursuant to which
Seller shall provide certain specified services to Buyer after
the closing and Buyer's acquisition of the Assets.
(c) Seller shall execute and deliver to Buyer a license agreement
(the "License Agreement") in substantially the form attached
hereto as EXHIBIT 3.2(C) pursuant to which Seller shall grant
Buyer a non-transferable, royalty-free license to use certain
specified intangible assets of Seller.
3.3 COVENANT TO COOPERATE. The parties shall cooperate with one another
with respect to the collection of Seller's accounts receivable in order to avoid
duplication of effort and preserve valuable customer relationships and shall
cooperate with one another to foster continuity in the Business and preserve
valuable vendor relationships. Seller shall reasonably cooperate with Buyer in
the preparation of an accounting audit of the facility and preparation of a 1998
income statement post-closing. Buyer shall pay the cost of the audit and
preparation upon Buyer's request of the income statement, but Seller shall
provide its cooperation at no cost to Buyer.
3.4 COVENANT NOT TO COMPETE. For a period of three years following the
closing date, Seller will not, within Oregon, Washington, or Idaho, directly or
indirectly (i) own, as a partner, stockholder, or otherwise, an interest in or
(ii) participate in the management, operation, or control of or (iii) perform
services or act in the capacity of an independent contractor, consultant, or
agent of any enterprise directly or indirectly engaged in the business of
processing and shredding tires and the manufacturing of products therefrom.
Seller will not, for a period of three years following the closing date,
directly or indirectly suggest, request, or encourage any prior suppliers or
customers of Seller to curtail, reduce, or cancel their business done with
Buyer. This covenant shall in no way prohibit Seller from transporting waste
tires in the geographic region described
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herein. Seller agrees that it would be impossible to measure the damage to Buyer
resulting from a breach of any covenant set forth in this Section 3.4 by Seller
and that monetary damages would be an inadequate remedy for any such breach.
Accordingly, Seller agrees that, if Seller breaches such a covenant, Buyer shall
be entitled, in addition to all other remedies it may have at law or in equity,
to an injunction or other appropriate order restraining any such breach, without
showing or proving any actual damage sustained by Buyer. In the event that a
covenant set forth in this Section 3.4 is determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too great a
period of time or over too great a geographical area or by reason of its being
too extensive in any other respect, it shall be interpreted to extend only over
the maximum period of time for which it may be enforceable and/or over the
maximum geographical area as to which it may be enforceable and/or to the
maximum extent in all other respects as to which it may be enforceable, all as
determined by such court in such action.
3.5 TAX MATTERS COVENANT. Seller will maintain income tax reporting
positions consistent with the IRS Form 8594 or other document described in
Section 1.5.
ARTICLE IV
BUYER'S REPRESENTATIONS, WARRANTIES, AND COVENANTS
4.1 BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and
warrants as follows:
(a) Buyer is a corporation duly organized and validly existing
under the laws of the State of Oregon. Buyer has all requisite
corporate power and authority to enter into this Agreement and
perform its obligations hereunder.
(b) The execution, delivery, and performance of this Agreement
have been duly authorized and approved by the Board of
Directors of Buyer and this Agreement constitutes a valid and
binding agreement of Buyer in accordance with its terms.
(c) Buyer has not employed any broker or finder in connection with
the transactions contemplated by this Agreement or taken any
action that would give rise to a valid claim against any party
for a brokerage commission, finder's fee, or other similar
payment.
(d) None of the representations or warranties of Buyer contain any
untrue statement of a material fact or omit or misstate a
material fact necessary in order to make the statements
contained therein not misleading.
(e) All representations and warranties made by Buyer shall survive
the closing date and survive for a period of eighteen (18)
months thereafter.
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4.2 GENERAL COVENANT OF BUYER. Between the effective date of this
Agreement and the closing date, Buyer will use its best efforts to consummate
the transaction contemplated by this Agreement and satisfy all of Buyer's
obligations under this Agreement.
4.3 TAX MATTERS COVENANT. Buyer will maintain income tax reporting
positions consistent with the IRS Form 8594 or other document described in
Section 1.5.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTIES
5.1 BUYER'S CONDITIONS PRECEDENT. The obligation of Buyer to consummate
the transaction contemplated by this Agreement is subject to the fulfillment,
before or on the closing date, of each of the following conditions, any one or a
portion of which may be waived in writing by Buyer and shall be deemed waived
upon closing of the transaction:
(a) All representations and warranties made in this Agreement by
Seller shall be true as of the closing date as fully as though
such representations and warranties had been made on and as of
the closing date, and Seller shall not have violated or failed
to perform in accordance with any covenant set forth in
Section 3.2.
(b) Buyer shall have been assigned Seller's contract interests or
have entered into new contracts with any customer of Seller
with respect to whom Buyer desires to do business, which
contracts shall, in the sole discretion of Buyer and its legal
counsel, be acceptable in form and substance.
(c) Seller shall have provided to Buyer documents which shall, in
the sole discretion of Buyer and its legal counsel, be
acceptable in form and substance and which evidence the
termination of all UCC financing statements covering any
portion of the Assets and the release of all liens against the
Assets.
(d) Seller shall have provided to Buyer documents and/or
information satisfactory to Buyer and its legal counsel, in
their sole discretion, evidencing that the Assets, and the use
thereof by Buyer in conduct of the Business, and in accordance
with the License Agreement will not infringe upon the patent,
trademark, copyright, or other intellectual property claim or
right of any person including those of Seller.
(e) The parties shall have prepared the IRS Form 8594 or other
document described in Section 1.5.
(f) Buyer shall have been assigned Seller's lease or have entered
into a new lease with Brattain International Trucks, Inc.,
which shall, in the sole
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discretion of Buyer and Buyer's legal counsel, be acceptable
in form and substance.
(g) Buyer shall have been assigned Seller's leasehold interests or
have entered into new lease agreements for the Premises
identified in Exhibit 5.1 which shall, in the sole discretion
of Buyer and Buyer's legal counsel, be acceptable in form and
substance.
(h) Buyer shall be able to validly obtain all federal, state, and
local environmental permits necessary to conduct the Business
without interruption and on substantially the same terms and
conditions as such permits granted to Seller.
(i) Buyer shall be able to validly obtain a local storm-water
permit for discharge purposes on substantially the same terms
and conditions such permit was granted to Seller.
5.2 SELLER'S CONDITIONS PRECEDENT. The obligation of Seller to
consummate the transaction contemplated by this Agreement is subject to the
fulfillment, before or on the closing date, of each of the following conditions,
any one or a portion of which may be waived in writing by Seller and shall be
deemed waived upon closing of the transaction:
(a) All representations and warranties made in this Agreement by
Buyer shall be true as of the closing date as fully as though
such representations and warranties had been made on and as of
the closing date, and Buyer shall not have violated or failed
to perform in accordance with the covenant set forth in
Section 4.2.
ARTICLE VI
INDEMNIFICATION AND SURVIVAL
6.1 INDEMNIFICATION BY SELLER. Seller hereby agrees to indemnify and
hold Buyer and its successors and assigns harmless from and against any breach
of Seller's representation and warranties, any and all claims, liabilities, and
obligations of every kind and description, contingent or otherwise, arising out
of or related to Seller's operation of the Business prior to the consummation of
the transaction described in this Agreement other than as described herein or
assumed by Buyer pursuant hereto, and any and all damage or deficiency resulting
from any misrepresentation, breach of warranty or covenant, or nonfulfillment of
any agreement on the part of Seller under this Agreement. This indemnification
expressly includes, without limitation, any and all claims, liabilities, and
obligations arising out of or related to the use and release of hazardous
substances or materials by Seller in connection with the Business. As used
herein, "hazardous substances and materials" means any substance defined as
hazardous or toxic by any federal, state, or local statute, rule, regulation, or
ordinance.
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6.2 INDEMNIFICATION BY BUYER. Buyer agrees to indemnify and hold Seller
harmless from and against any and all claims, liabilities, and obligations of
every kind and description arising out of or related to the operation of the
Assets following the consummation of the transaction described in this Agreement
and any and all damage or deficiency resulting from any misrepresentation,
breach of warranty or covenant, or nonfulfillment of any agreement on the part
of Buyer under this Agreement. This indemnification expressly includes, without
limitation, any and all claims, liabilities, and obligations arising out of or
related to the use and release of hazardous substances or materials by Buyer in
connection with the Business.
ARTICLE VII
CLOSING
7.1 CLOSING DATE. The transaction described in this Agreement shall be
closed at the offices of Pacific Northwest Title of Oregon, 1211 SW Fifth
Avenue, Suite 2650, Portland, OR 97204, ("Escrowee") on January 29th, 1999, or
at such other time as the parties may agree in writing. Buyer and Seller shall
each bear one half of the costs of such closing.
7.2 OBLIGATIONS OF SELLER AT CLOSING. At the closing, and
coincidentally with the performance by Buyer of its obligations described in
Section 7.3, Seller shall execute and deliver to Buyer the following:
(a) An Assignment and Bill of Sale substantially identical to the
form attached as EXHIBIT 7.2(A);
(b) A Services Agreement substantially identical to the form
attached hereto as EXHIBIT 3.2(B);
(c) A License Agreement substantially identical to the form
attached hereto as EXHIBIT 3.2(C);
(d) Certificates of Title for all vehicles ("Titles") executed by
Seller. However, should Seller be unable to locate all Titles
for delivery into escrow at the closing, Seller shall locate
and deliver such titles to Buyer or Seller shall obtain
replacement titles as soon as possible after closing all at
Seller's sole cost and expense;
(e) UCC-3 Termination Statements executed by the secured parties
for each of the financing statements listed on Exhibit 7.2(e);
and
(f) Such other certificates and documents as may be required by
the provisions of this Agreement.
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7.3 OBLIGATIONS OF BUYER AT CLOSING. At the closing, and coincidentally
with the performance by Seller of its obligations described in Section 7.2,
Buyer shall deliver or, as appropriate, execute and deliver to Seller the
following:
(a) Payment of the Purchase Price described in Article II in
immediately available funds by certified or bank cashier's
check or electronic wire transfer to an account designated by
Seller;
(b) An Assumption Agreement with respect to the leases, contracts,
and agreements arranged by Seller to Buyer substantially
identical to the form attached hereto as EXHIBIT 7.3; and
(c) Such other certificates and documents as may be required by
the provisions of this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 RISK OF LOSS. The risk of loss, damage, or destruction to any of
the Assets shall borne by Seller to the time of the consummation of the
transaction contemplated by this Agreement, and thereafter by Buyer.
8.2 NOTICES. Any notice required by this Agreement shall be sent by
facsimile to the parties at the addresses listed on Page 1 of this Agreement.
Copies of all notices shall be sent by facsimile to the legal counsel of Buyer
and Seller.
8.3 INCORPORATION OF COLLATERAL DOCUMENTS. All exhibits attached to
this Agreement or delivered pursuant to this Agreement shall be deemed a part of
this Agreement and incorporated herein, where applicable, as if fully set forth
herein.
8.4 SEVERABILITY. Any provision of this Agreement that is deemed
invalid or unenforceable shall be ineffective to the extent of such invalidity
or unenforceability, without rendering invalid or unenforceable the remaining
provisions of this Agreement.
8.5 WAIVER. No provision of this Agreement shall be waived unless the
waiver is in writing and signed by the waiving party. The failure by any party
to insist upon the strict performance of any provision of this Agreement or to
exercise any right or remedy consequent upon a breach thereof shall not
constitute a waiver of any such breach, of such provision, or of any other
provision. No waiver of any provision of this Agreement shall be deemed a waiver
of any other provision of the Agreement or a waiver of such provision with
respect to any subsequent breach, unless expressly provided in writing.
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8.6 ATTORNEY'S FEES. In the event of any dispute or litigation between
the parties to declare or enforce any provision of this Agreement, the
prevailing party shall be entitled to recover from the losing party, in addition
to any other recovery and costs, reasonable attorney's fees incurred with
respect to such dispute or in such litigation, in both the trial and in all
appellate courts and in any bankruptcy proceeding.
8.7 MERGER. This Agreement embodies the entire agreement of the parties
hereto. There are no promises, terms, conditions, or obligations other than
those contained herein. This Agreement supersedes all prior communications,
representations, and agreements, verbal or written, between the parties hereto
and shall not be amended except in writing subscribed to by the parties hereto.
8.8 ASSIGNMENT. This Agreement may not be assigned or transferred by
any party without the prior written consent of the other party.
8.9 SUCCESSORS. This Agreement shall inure to the benefit of the
successors and assigns of the respective parties hereto.
8.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.11 GOVERNING LAW AND VENUE. This Agreement shall be governed by and
construed according to Oregon law, without regard to conflict of law principles
thereunder. The parties agree that all disputes relating to this Agreement shall
be tried before the courts of Oregon, with venue in Multnomah County, Oregon, to
the exclusion of all other courts that might have jurisdiction except for this
provision.
Dated and agreed to as of the date first set forth above.
SELLER: BUYER:
Waste Recovery, Inc. RB Recycling, Inc.
By: By:
------------------------------ -------------------------------
PAUL GILSON
Its: Its: Executive Vice President
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EXHIBIT 1.1(B)
ASSETS
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(VEHICLES, MACHINERY, EQUIPMENT, TOOLS, SUPPLIES, FURNITURE, AND FIXTURES)
QTY DESCRIPTION
LOT TIRE SHREDDER SYSTEM, INCLUDES BELT CONVEYOR FEEDS, GEAR REDUCTION BOX,
FRONT TIRE SHREDDER, DISK SCREENS, CONVEYOR OUTFEEDS, ELECTRICAL POWER
SYSTEM, ALL RELATED MOTORS, DRIVES, ETC., ALSO INCLUDES SPARE ROTORS
AND CUTTER KNIVES.
1 BELT CONVEYOR, APPROX. 36" X 30' TIRE INFEED, W/TIRE SHREDDER SYSTEM
1 BELT CONVEYOR, APPROX. 48" X 40', ELEVATED, WITH DRIVE, W/TIRE SHREDDER
SYSTEM
1 TIRE SHREDDER, CUSTOM, INCLUDES TWIN APPROX. 48" X 36" ROTORS, APPROX.
(275) TOTAL KNIVES, FEED HOPPER, ALL RELATED PERIPHERAL EQUIPMENT AND
ACCESSORIES, W/TIRE SHREDDER SYSTEM
1 GEAR REDUCTION BOX, HANSEN, WITH APPROX. 200 H.P. MOTOR, W/TIRE
SHREDDER SYSTEM
1 1 BELT CONVEYOR, APPROX. 36" X 15' WITH DRIVE, W/TIRE SHREDDER SYSTEM
1 1 BELT CONVEYOR, APPROX. 32" X 50', ELEVATED, WITH DRIVE, W/TIRE
SHREDDER SYSTEM
1 DISK SCREEN, APPROX. 4', WITH DRIVE MOTORS, HEAVY DUTY FRAME AND BOX,
ALSO INCLUDES FEED HOPPER, W/TIRE SHREDDER SYSTEM
1 BELT CONVEYOR, APPROX. 32" X 60', ELEVATED, WITH DRIVE, W/TIRE SHREDDER
SYSTEM
LOT ELECTRICAL POWER SYSTEM, INCLUDES SQUARE D2000 AMP SWITCH GEAR, RELATED
TRANSFORMERS, SWITCHES, BREAKERS, POWER SOURCE, W/TIRE SHREDDER SYSTEM
1 TIRE SPLITTER, NO MFG. PLATE AVAILABLE
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QTY DESCRIPTION
LOT PRIMARY GRANULATOR SYSTEM, CONSISTING OF INFEED BELT CONVEYORS, METAL
DETECTOR, GRANULATOR, MOTORS, VIBRATING PAN, MAGNETIC BELT CONVEYOR,
OUTFEED CONVEYORS, ELECTRICAL POWER SYSTEM, ALL RELATED PERIPHERAL
EQUIPMENT AND ACCESSORIES, ALSO INCLUDES SPARE CUTTER KNIVES
1 BELT CONVEYOR, APPROX. 48" X 60' IDLER TROUGH ROLL CONVEYOR, WITH
DRIVE, W/PRIMARY GRANULATOR SYSTEM
1 METAL DETECTOR, PROBABLE TECTRON, APPROX. 36" OPENING, W/PRIMARY
GRANULATOR SYSTEM
1 GRANULATOR, CUSTOM, APPROX. 54" OPENING, INCLUDES (2) KNIFE BLOCKS,
RELATED PERIPHERAL EQUIPMENT AND ACCESSORIES, W/PRIMARY GRANULATOR
SYSTEM
2 MOTORS, TECO, 400 H.P., W/PRIMARY GRANULATOR SYSTEM
1 VIBRATING PAN, APPROX. 5' X 7', W/PRIMARY GRANULATOR SYSTEM
1 MAGNETIC BELT CONVEYOR, APPROX. 4' X 6', MOTORIZED, W/PRIMARY
GRANULATOR SYSTEM
1 BELT CONVEYOR, APPROX. 30" X 100'; ELEVATED IDLER TROUGH ROLL, WITH
DRIVE, W/PRIMARY GRANULATOR SYSTEM
1 MAGNETIC BELT CONVEYOR, APPROX. 30" X 8', MOTORIZED, W/PRIMARY
GRANULATOR SYSTEM
1 BELT CONVEYOR, APPROX. 24" X 25', ELEVATED IDLER TROUGH ROLL, WITH
DRIVE, W/PRIMARY GRANULATOR SYSTEM
LOT ELECTRICAL POWER SYSTEM, INCLUDES SWITCHGEAR, ASSTD. TRANSFORMERS,
SWITCHES, BREAKERS, ETC., W/PRIMARY GRANULATOR SYSTEM
<PAGE>
QTY DESCRIPTION
LOT WIRE GRANULATOR SYSTEM, CONSISTING OF BELT CONVEYORS, METAL DETECTOR,
GRANULATOR, MAGNETIC BELT CONVEYOR, VIBRATING PANS, ELECTRICAL POWER
SYSTEM, ETC., INCLUDES ALL RELATED PERIPHERAL EQUIPMENT AND
ACCESSORIES, ALSO INCLUDES SPARE CUTTER KNIVES
1 BELT CONVEYOR, APPROX., 22" X 35', ELEVATED IDLER TROUGH ROLL, WITH
DRIVE, W/WIRE GRANULATOR SYSTEM
1 BELT CONVEYOR, APPROX. 24" X 40', ELEVATED IDLER TROUGH ROLL WITH
DRIVE, W/WIRE GRANULATOR SYSTEM
1 METAL DETECTOR, PROBABLE TECTRON, APPROX. 28" OPENING, W/WIRE
GRANULATOR SYSTEM
1 GRANULATOR, APPROX. 54" OPENING, CUSTOM, INCLUDES (2) KNIFE BLOCKS,
RELATED PERIPHERAL EQUIPMENT AND ACCESSORIES, W/WIRE GRANULATOR SYSTEM
1 MOTOR, PROBABLE TECO, 450 H.P., W/WIRE GRANULATOR SYSTEM
1 MAGNETIC BELT CONVEYOR, APPROX. 6' X 8', MOTORIZED, W/WIRE GRANULATOR
SYSTEM
2 VIBRATING PANS, APPROX. 5' X 7', W/WIRE GRANULATOR SYSTEM
1 BELT CONVEYOR, APPROX. 24" X 50', ELEVATOR IDLER TROUGH ROLL, WITH
DRIVE, W/WIRE GRANULATOR SYSTEM
1 BELT CONVEYOR, APPROX., 24" X 35' ELEVATED IDELER TROUGH ROLL, WITH
DRIVE, W/WIRE GRANULATOR SYSTEM
1 BELT CONVEYOR, APPROX. 24" X 100' ELEVATED IDLER TROUGH ROLL,
MOTORIZED, OUTFEED, W/WIRE GRANULATOR SYSTEM
LOT ELECTRICAL POWER SYSTEM, SQUARE D, MODEL 6 CONTROL CENTER, TWIN
SECTIONS, (9) TOTAL SWITCHES, 600 AMP HORIZONTAL/300 VERTICAL, WITH
TRANSFORMERS, SWITCHES, BREAKERS, ETC., W/WIRE GRANULATOR SYSTEM
<PAGE>
QTY DESCRIPTION
LOT COMPUTER HARDWARE, INCLUDES NOTEBOOK COMPUTER, (2) AST MODEL 622
ADVANTAGE DESKTOP COMPUTERS, (2) 486 COMPUTER SYSTEMS, (2) 386 COMPUTER
SYSTEMS, HEWLETT PACKARD DESKJET 600C PRINTER, HEWLETT PACKARD DESKJET
520 PRINTER, HEWLETT PACKARD LASERJET 5P PRINTER, ESPON ACTION LASER
1500 PRINTER, PANASONIC MODEL KX-P1624 PRINTER, ETC.
LOT OFFICE MACHINES & EQUIPMENT, INCLUDES (6) CALCULATORS, CANON MODEL
NP3050 COPIER, TELEPHONE SYSTEM SURVEILLANCE SYSTEM WITH CAMERA AND
TOSHIBA TIMELAPSES RECORDER, SYMPHONIC TV/VCR, REFRIGERATOR, MICROWAVE
OVEN, (2) IBM TYPEWRITERS, (2) HEWLETT PACKARD OFFICE JET FAX MACHINES,
HAND HELD RADIOS, ETC., LOCATED THROUGHOUT
LOT OFFICE FURNITURE, CONSISTING OF BOOKCASE, CABINET, (23) ASSTD. CHAIRS,
(14) ASSTD. DESKS, (20) ASSTD. FILE CABINETS, (7) ASSTD. TABLES, ETC.,
LOCATED THROUGHOUT BORTHWICK OFFICES
1 WELDER, MILLER, MILLERMATIC 250, S/N KF938195, BUILT-IN WIRE FEED 1
WELDER, MILLER, MODEL SRH-303, S/N HJ117271, WITH MODEL S-32S WIRE FEED
1 AIR COMPRESSOR, CHAMPION, HORIZONTAL TANK, SINGLE STAGE WITH KOHLER
MODEL K241S SINGLE CYLINDER GAS ENGINE
1 DRILL PRESS, FOREMOST, MODEL MADP075AMA, S/N 96237
1 OXY/ACY TORCH OUTFIT, WITH HEAVY DUTY CART, GAUGES, TIPS, HOSE, TORCH
1 CUTOFF SAW, APPEARS CUSTOM, APPROX. 12" BLADE, APPROX. 3 H.P. MOTOR,
HEAVY DUTY FRAME
1 HACK SAW, RACINE, LIGHT DUTY
1 TIRE SPLITTER, HEAVY DUTY FRAME, WITH PRECISION EQUIPMENT CYLINDER, 15
H.P. HYDRAULIC UNIT
<PAGE>
QTY DESCRIPTION
1 TRUCK LOADING UNIT, INCLUDES APPROX. 12" X 10' AUGER SCREW CONVEYOR,
DUMP HOPPER, APPROX. 1 H.P. DRIVE MOTOR, FRAME MOUNTED, PORTABLE, ALSO
INCLUDES APPROX. 12" X 40' ELEVATED MOTORIZED BELT CONVEYOR
1 WELDER, MILLER, MODEL SRH-404, S/N HH051803
1 AIR COMPRESSOR, QUINCY, MODEL 350, S/N 418761, HORIZONTAL TANK, HEAVY
DUTY SINGLE STAGE, 10 H.P., WITH AIR RECEIVING TANK [c+]
1 HOIST, 1 TON, WITH TROLLEY
1 WELDER, MILLER, COMPO 600, S/N R370887, WITH MILLER MODEL S32S WIRE
FEED, LEADS, HEAVY DUTY, LOCATED AT FABRICATION BUILDING
1 WELDER, MILLER, MILLERMATIC 200, S/N JET45169, LOCATED AT FABRICATION
BUILDING
1 AIR COMPRESSOR, INGERSOLL RAND, TYPE 30, MODEL 5X3X3-1/2, MODEL 253D5,
S/N 241295, 2-STAGE, HORIZONTAL TANK, 5 H.P.
1 OXY/ACY TORCH OUTFIT, WITH CART, GAUGES, TIPS, HOSE, TORCH
1 DRILL PRESS, BARNES, 20", BELT DRIVE, OLDER STYLE
LOT POWER AND HAND TOOLS, LOCATED THROUGHOUT FABRICATION BUILDING,
CONSISTING OF DOUBLE END GRINDERS, RIGHT ANGLE GRINDERS, DRILLS, SAWS,
ETC.
LOT MAINTENANCE SHOP EQUIPMENT, CONSISTING OF BATTERY CHARGER, BLOWER,
BOTTLE JACK, CHAIN HOIST, DOLLY, DRUM PUMPS, FILTER PUMP, FLOOR JACK,
FUEL TANK, HEATERS, JACK STANDS, LADDERS, PIPE STANDS, LOCKER SECTIONS,
PALLET RACKS, PARTS CABINETS, PUMP, RACK SECTIONS, RETRACTABLE REELS,
VISES, WHEELBARROWS, WORKBENCHES, ASSTD. POWER AND HAND TOOLS, ETC.,
LOCATED THROUGHOUT, INCLUDES THOSE ASSETS NOT PREVIOUSLY LISTED
3 DOLLIES, ASSORTED
<PAGE>
QTY DESCRIPTION
1 WHEEL LOADER, CASE, MODEL 721B, S/N JAK0023011, ENCLOSED CAB, 20.5-25
TIRES, DIESEL ENGINE, APPROX. 2-1/2 CU.YD. FRONT LOADER BUCKET, [C]
1 FLATBED TRUCK, FORD, MODEL F350, FX2, S/N NOT AVAILABLE, STANDARD
TRANSMISSION, PROBABLY EARLY 90s VINTAGE
1 FORKLIFT, CLARK, MODEL GPS30MC, S/N GP138MC-0033-9110, 4,450 LB.
CAPACITY, 188" LIFT HEIGHT, TRIPLE MAST, CUSHION TIRES, LPG GAS
1 TRUCK TRACTOR, KENWORTH, S/N NOT READABLE, CABOVER, SINGLE AXLE,
PROBABLE EARLY 1980s VINTAGE, LIST SHOWS S/N ENDS IN 3040
1 WHEEL LOADER, CASE MODEL 821, S/N ENDS IN 24270 23.5-25 TIRES, APPROX.
2-1/2 CU. YD. FRONT LOADER BUCKET, ENCLOSED CAB, DIESEL ENGINE, [C]
1 WHEEL LOADER, JOHN DEERE, MODEL 544C, S/N NOT AVAILABLE, ENCLOSED CAB,
DIESEL ENGINE, 17.5-25 TIRES, TIRES FAIR, APPROX. 1-1/2 CU. YD. FRONT
LOADER HYDRAULIC BUCKET/CLAMP ATTACHMENT, [C]
1 LIFE TRUCK, WHITE GMC, NO S/N AVAILABLE, TANDEM AXLE, APPROX. LATE
70s-EARLY 80s VINTAGE, INCLUDES CALLAHAN HOIST/LIF WITH 5TH WHEEL, S/N
86-DC-0156
1 HYDRAULIC EXCAVATOR, JOHN DEERE, MODEL 690D-LC, S/N DW690DL520328,
APPROX. 30" X 10' CRAWLERS, UNDERCARRIAGE FAIR, ENCLOSED CAB, APPROX.
10' STICK, WITH GEITH EXCAVATOR BUCKET WITH HANDLING ATTACHMENT, [C]
1 TRUCK TRACTOR, 1978, FORD, S/N ENDS WITH 8036, #609
1 TRUCK TRACTOR, 1984, FORD, S/N ENDS WITH 4045, FLATBED DUMP, #77
1 HOIST TRUCK, 1974 MACK, S/N ENDS WITH 5780, #548
1 TRUCK TRACTOR, 1954, GMC, S/N ENDS WITH 2954, #841 PLUS 3 DROP BOXES
1 TRUCK TRACTOR, 1989, WHITE, S/N ENDS WITH 6231, #58066
<PAGE>
QTY DESCRIPTION
1 1968 TRAILMOBILE TRAILER, 96", 40', 004, 3611
2 1979 GMC DROP BOX TRICK, 007, 4826
7 1974 TRAILMOBILE TRAILER, 96", OT, 12, 372
8 1974 TRAILMOBILE TRAILER, 96" OT, 13, 338
10 1972 TRAILMOBILE TRAILER, 96", OT, 26, 2470
12 1972 TRAILMOBILE TRAILER, 96", OT, 30, 2491
13 1979 HIGHWAY (DROP FRAME) TRAILER, 96", 40', 31, 3887
14 1981 MONON TRAILER, 96", OT, 36, 5138
1 MONON TRAILER, 96" OT, 36, 5138
1 PINESXPOST TRAILER, 96" OT, 40, 6722
1 PINESXPOST TRAILER, 96" OT, 41, 6841
1 PINESXPOST TRAILER, 96" OT, 42, 6802
1 PINES TRAILER, 96", OT, 44, 4094
1 PINES TRAILER, 96", OT, 46, 4090
1 PINES TRAILER, 96" OT, 47, 4324
1 PINES TRAILER, 96", OT, 50, 4637
1 INES TRAILER, 96", OT, 42, 4175
1 PINES TRAILER, 102", OT, 54, 4122
1 PINES TRAILER, 102", OT, 58, 4050
1 PINES TRAILER, 102", 63, 1229
1 PINES TRAILER, 102", OT, 65, 4121
1 PINES TRAILER, 102", OT, 71, 3981
1 PINES TRAILER, 96", OT, 74, 6355
1 PINES TRAILER, 96", OT, 75, 6356
<PAGE>
QTY DESCRIPTION
1 1984 ORWST BOX TRAILER, 77, 4748
1 1985 PINES TRAILER, 96", OT, 78, 6465
1 1985 PINES TRAILER, 96", OT, 81, 6294
1 1985 PINES TRAILER, 96", OT, 82, 6408
1 1987 PINES TRAILER, 102", OT, 83, 4191
1 1987 PINES TRAILER, 102", OT, 84, 4057
1 1987 PINES TRAILER, 102", OT, 85, 4031
1 1987 PINES TRAILER, 102", OT, 86, 4024
1 1987 PINES TRAILER, 102", OT, 87, 4196
1 1987 PINES TRAILER, 102", OT, 88, 4211
1 1987 PINES TRAILER, 102", OT, 93, 4093
1 1987 PINES TRAILER, 102", OT, 95, 4146
1 1987 PINES TRAILER, 102", OT, 96, 4193
1 1985 PINES TRAILER, 102", OT, 106, 6275
1 1985 PINES TRAILER, 102", OT, 107, 6431
1 1985 PINES TRAILER, 102", OT, 108, 6326
1 1985 PINES TRAILER, 96", OT, 111, 6400
1 TRAILMOBILE TRAILER, 96", OT, 118, 5146
1 PINES TRAILER, 102", OT, 126, 6815
1 HOBBS TRAILER, 96", OT, 139, 7607
1 HOBBS TRAILER, 96", OT, 142, 9761
1 PINES TRAILER, 102", OT, 156, 2424
1 PINES TRAILER, 102", OT, 160, 2409
1 PINES TRAILER, 102", OT, 161, 2413
<PAGE>
QTY DESCRIPTION
1 PINES TRAILER, 102", OT, 164, 2395
1 PINES TRAILER, 102" OT, 169, 2423
1 FREUHAUF WALKING TRAILER, 96", 40' 201, 8436
1 FREUHAUF WALKING TRAILER, 96" 40', 202, 8419
1 FREUHAUF WALKING TRAILER, 96", 40', 203, 8417
1 1989 VOLVO WHITE TRUCK TRACTOR
<PAGE>
EXHIBIT 1.1(c)
ASSETS
(ACCOUNTS, CONTRACTS, LEASES, FRANCHISES, AND COMMITMENTS)
Brattain International Truck Lease
<PAGE>
EXHIBIT 1.2(f)
ASSETS EXCLUDED
NONE
<PAGE>
EXHIBIT 3.1(c)
EXCEPTIONS
NONE
<PAGE>
EXHIBIT 3.1(g)
EXCEPTED LEASES AND CONTRACTS
NONE
<PAGE>
EXHIBIT 3.2(b)
SUPPLY AND SERVICES AGREEMENT
THIS SUPPLY AND SERVICES AGREEMENT (the "Agreement") is made and
entered into as of the 29th day of January, 1999, by and between Waste Recovery,
Inc., a Texas corporation ("WRI"), and RB Recycling, Inc., an Oregon corporation
("RB").
W I T N E S S E T H:
WHEREAS, pursuant to the Agreement for Sale and Purchase of Assets
dated as of even date herewith (the "Purchase Agreement"), by and between WRI
and RB, WRI has agreed to sell, and RB has agreed to purchase, certain specified
assets of WRI located in and around Portland, Oregon (the "Acquisition"); and
WHEREAS, RB desires to have available certain services from WRI, and
WRI desires to make such services available to RB; and
WHEREAS, RB desires to assure that it will continue to have a source of
scrap tire after the closing date of the Purchase Agreement and WRI desires to
sell scrap tire to RB; and
WHEREAS, the Purchase Agreement provides, as a condition to the closing
thereunder, that WRI and RB shall execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and in consideration
of the mutual covenants hereinafter contained, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
1. PURCHASE AND SALE OF SCRAP TIRE. Subject to the terms and conditions
of this Agreement, RB agrees to purchase from WRI on terms and conditions
acceptable to it and WRI, and WRI agrees to sell to RB on terms and conditions
acceptable to it and RB, such scrap tire as WRI shall bring to RB's facilities
from time to time during the term of this Agreement.
2. PROVISION OF SERVICES.
(a) WRI shall provide the following services to RB, as and to
the extent requested by RB:
(i) Provide RB with the time and attention of
management or other qualified personnel of WRI for the
provision of technical and consulting advice and
recommendations as shall be necessary to assist RB in the
development and implementation of its business strategies.
<PAGE>
(ii) Provide RB, to the extent available or in the
possession of WRI, such parts and equipment that RB shall
determine is necessary or advisable to operate the assets
acquired by RB in the Acquisition.
(b) For WRI's performance of the services and delivery of the
materials described in this SECTION 2, RB shall pay WRI a fee equal to
the sum of the cost of the materials and salaries of WRI in providing
such services and materials plus twenty percent (20%). The Seller's
reasonable cooperation and services in the preparation of an accounting
audit of the facility and a 1998 income statement, as contemplated by
paragraph 3.3 of the Purchase Agreement, shall be without such
compensation.
3. PAYMENT AND OTHER TERMS. Upon receipt of WRI's invoice for scrap
tire purchased from it by RB pursuant to SECTION 1 or for the provision of
services and materials by WRI pursuant to SECTION 2, RB shall make payment to
WRI net thirty (30) days after the date of delivery of such invoice to RB. All
terms and conditions of sales hereunder not specified in this Agreement shall be
same as specified in the form of purchase order governing the purchase and sale.
4. TERM OF AGREEMENT. The term of this Agreement shall be for a period
of three (3) years, commencing on the date hereof. Thereafter, this Agreement
shall be automatically renewed from year to year unless either party gives the
other party not less than thirty (30) days written notice of its desire to
terminate this Agreement.
5. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which together shall constitute one and the same instrument.
6. NOTICES. Any notice, request, instruction, document or other
communication to be given hereunder by any party hereto to any other party
hereto shall be in writing and validly given if (i) delivered personally, (ii)
sent by telecopy, (iii) delivered by reputable overnight express, or (iv) sent
by registered or certified mail, postage prepaid, as follows:
If to WRI:
Waste Recovery, Inc.
309 S. Pearl Expressway
Dallas, Texas 75201
Telecopy No.: (214) 745-8945
Attention: President
If to RB:
RB Recycling, Inc.
904 East 10th Avenue
McMinnville, Oregon 97128
Telecopy No.: (503) 434-4455
Attention: President
<PAGE>
or at such other address for a party as shall be specified by like notice. Any
notice which is delivered personally, or sent by telecopy or overnight express
in the manner provided herein shall be deemed to have been duly given to the
party to whom it is directed upon actual receipt by such party. Any notice which
is addressed and mailed in the manner herein provided shall be conclusively
presumed to have been given to the party to whom it is addressed at the close of
business, local time of the recipient, on the third day after the day it is so
placed in the mail.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
between the parties hereto with respect to the subject matter hereof, and no
party shall be liable or bound to the other in any manner by any representations
or warranties not set forth herein.
8. GOVERNING LAW AND VENUE. This Agreement shall be governed by and
construed according to Oregon law, without regard to conflict of law principles
thereunder. The parties agree that all disputes relating to this Agreement shall
be tried before the courts of Oregon, with venue in Multnomah County, Oregon, to
the exclusion of all other courts that might have jurisdiction except for this
provision.
9. CAPTIONS. The captions of the various sections of this Agreement are
for convenience of reference only and shall not affect the interpretation of the
provisions hereof.
10. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by
either party except with the prior written consent of the other party hereto.
This Agreement, and all of the terms, covenants and conditions hereof, shall be
binding upon, and inure to the benefit of and be enforceable by, the parties
hereto and their successors and permitted assigns.
11. FURTHER ASSURANCES. The parties agree to execute and deliver all
such other instruments and documents, and to take such further action, as shall
be necessary to carry out the provisions and purposes of this Agreement.
12. MODIFICATION AND WAIVER. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled to
the benefits thereof, and this Agreement may be modified or amended by a written
instrument executed by all parties hereto. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by both
parties. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not similar)
nor shall such waiver constitute a continuing waiver.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
WASTE RECOVERY, INC.
By:
--------------------------------------
Printed Name:
----------------------------
Title:
-----------------------------------
RB RECYCLING, INC.
By:
--------------------------------------
Printed Name: Paul Gilson
-----------
Title: Executive Vice President
------------------------
<PAGE>
EXHIBIT 3.2(C)
LICENSE AGREEMENT
This Agreement is made the 29th day of January, 1999, between Waste
Recovery, Inc. (hereinafter, "WRI"), a Texas corporation located and doing
business at 309 South Pearl Expressway, Dallas, Texas 75201, and RB Recycling,
Inc. (hereinafter "RB"), an Oregon corporation doing business at 904 E. 10th
Avenue, McMinnville, Oregon 97128.
WHEREAS, pursuant to that certain Agreement for Sale and Purchase of
Business Assets between WRI and RB dated of even date herewith (the "Purchase
Agreement"), WRI has agreed to sell and RB has agreed to acquire certain
equipment that incorporates certain intellectual property of WRI, as more fully
defined under this Agreement; and
WHEREAS, RB desires to obtain from WRI, and WRI desires to grant to RB,
a perpetual, royalty-free, fully-paid up and non-exclusive license to utilize
the intellectual property of WRI to maintain, repair and enhance the equipment
acquired by RB from WRI pursuant to the Purchase Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed:
DEFINITIONS.
1.1 "Equipment" means the equipment which RB acquired pursuant to
the Purchase Agreement and which incorporates the Intellectual
Property.
1.2 "Intellectual Property" means the patents and patent
applications set forth in Exhibit A attached hereto, including
any technical or user documentation relating to the Equipment.
1.3 "Terminating Event" means each and any of the events described
in Paragraph 5 of this Agreement.
1.4 "WRI Confidential Information" means the confidential,
proprietary and trade secret information of WRI, as more fully
described in Paragraph 3 of this Agreement.
LICENSE.
2.1 Subject to the terms and provisions hereof, WRI hereby grants
to RB, under all of WRI's rights in and to the Intellectual
Property, a perpetual, royalty-free, fully
<PAGE>
paid-up, and non-exclusive license to use the Intellectual
Property in connection with RB's use of the Equipment acquired
by it from WRI pursuant to the Purchase Agreement. RB may
assign or sublicense the rights granted under this paragraph
upon the sale or transfer of the Equipment to a third party.
2.2 Subject to the terms and provisions hereof, WRI grants to RB,
under all of WRI's rights in and to the Intellectual Property,
a perpetual, royalty-free, fully paid-up, and non-exclusive
license to use, make or have made, copy or have copied, and
create derivative works and modifications of the Intellectual
Property for the purpose of maintaining, repairing and
enhancing the Equipment. RB may not assign or sublicense the
rights granted under this paragraph to any third party, except
that RB may engage third party contractors to assist RB in
maintaining, repairing and enhancing the Equipment pursuant to
the license granted herein.
CONFIDENTIALITY.
3.1 During the term of this Agreement, WRI may disclose to RB
certain confidential, proprietary and trade secret information
relating to the Equipment or Intellectual Property ("WRI
Confidential Information"). To be considered WRI Confidential
Information: (i) tangible disclosures must be marked with a
"confidential", "proprietary" or similar legend, and (ii)
non-tangible disclosures must be identified as confidential
prior to disclosure and reduced to writing, marked as provided
above, and delivered to RB within thirty (30) days of the
original disclosure.
3.2 RB will not disclose the WRI Confidential Information to any
third party without WRI's written consent, except to RB's
parent company and third party contractors who have a need to
know and who agree to abide by the applicable provisions of
this Agreement.
3.3 WRI Confidential Information does not include any information
which is: (i) rightfully in the public domain or otherwise
known to the public other than by breach of a duty to WRI,
(ii) rightfully received by RB from a third party without any
obligation of confidentiality, (iii) rightfully known to RB
without any limitation on use or disclosure prior to its
receipt from WRI, (iv) shown by RB to have been independently
developed by employees or contractors of RB, or (v) generally
made available to third parties by WRI without restriction on
disclosure.
TERM AND TERMINATION. This Agreement shall be effective on the date the
Agreement is fully executed and shall continue in perpetuity unless a
Terminating Event occurs as described in Paragraph 5. Termination of
this Agreement shall be without prejudice to any remedy of the parties
for any antecedent breach of this Agreement.
<PAGE>
TERMINATING EVENT.
5.1 This Agreement shall terminate upon breach of a material
obligation herein by either party.
5.2 WRI may terminate this Agreement immediately upon providing
written notice to RB upon any unauthorized disclosure by RB of
WRI Confidential Information.
OWNERSHIP. WRI shall retain all right, title and interest, including all
intellectual property rights, in and to the Intellectual Property and
WRI Confidential Information. RB shall own all right, title and
interest, including all intellectual property rights, in and to any
derivative works, modifications or enhancements it makes to the
Intellectual Property, subject to WRI's ownership and rights in the
underlying Intellectual Property.
REPRESENTATIONS, WARRANTIES AND COVENANTS.
7.1 WRI hereby represents and warrants that: (i) it has the full
right, power and authority to enter into this Agreement, to
perform all of its duties hereunder, and to consummate all of
the transactions contemplated herein; (ii) it owns title in
and to the Intellectual Property; and (iii) it has not
received any written notice of any third party use of the
Intellectual Property or that the Intellectual Property
infringes upon the intellectual property rights (including any
patent, copyright, trade secret or other intellectual property
rights) of any third party.
7.2 RB warrants that: (i) it has the full right, power and
authority to enter into this Agreement, to perform all its
obligations hereunder, and to consummate all of the
transactions contemplated herein, and (ii) it will not move
the Equipment to any location outside the States of Oregon,
Washington or Idaho without the prior written consent of WRI,
which consent shall not be unreasonably withheld.
NOTICE. All notices, requests, or consents required hereunder shall be in
writing and shall be deemed to have been properly given or sent (i) on
the day of delivery if such notice, request, or consent is personally
delivered and acknowledged, or is sent by certified or registered mail,
return receipt requested, or (ii) one (1) business day after the same
was sent, if sent by reputable overnight courier delivery, as follows:
If to WRI: Waste Recovery, Inc.
309 South Pearl Expressway
Dallas, Texas 75201
Attn: President
If to RB: RB Recycling, Inc.
904 E. 10th Avenue
McMinnville, Oregon 97128
Attn: President
<PAGE>
Anyone entitled to notice hereunder may change the address to which
notices or other communications are to be sent to it by notice given in
the manner contemplated herein.
RIGHT OF FIRST REFUSAL. In the event that RB reaches an agreement with any third
party with respect to the sale or other transfer or disposition of the
Equipment, RB shall provide written notice to WRI disclosing the terms
and conditions of such proposed transaction, which shall constitute an
offer to sell to WRI upon the terms and conditions set forth in the
notice, and WRI shall have a period of fourteen (14) days within which
to accept such offer and purchase the Equipment. In the event that WRI
declines to purchase the Equipment or fails to respond to RB's notice
within such fourteen (14) day period, RB may sell the Equipment upon
terms and conditions of sale that do not differ materially from those
set forth in the written notice to WRI. In the event the terms or
conditions of sale change materially from those set forth in the
written notice, or RB does not sell the Equipment, RB shall follow the
procedures set forth in this Section 9 with respect to future
transactions to permit WRI a continuing right to acquire the Equipment.
INDEMNITY.
10.1 WRI shall indemnify, defend and hold RB harmless from and
against any loss, cost, liability, and expense (including
reasonable attorneys' fees) arising out of any claim or action
brought against RB alleging that the Equipment or Intellectual
Property infringes any patent, copyright, trade secret or
other intellectual property right of any third party. WRI
further agrees to indemnify, defend and hold RB harmless from
and against any action, claim, loss, cost, liability and
expense (including reasonable attorneys' fees) incurred or
suffered by RB arising out of WRI's breach of any of its
representations, warranties or commitments under Section 7.1
of this Agreement.
10.2 RB shall indemnify, defend and hold WRI harmless from and
against any action, claim, loss, cost, liability and expense
(including reasonable attorneys' fees) incurred or suffered by
WRI arising out of RB's breach of any of its representations,
warranties or commitments under Section 7.2 of this Agreement.
ASSIGNMENT. Except as otherwise provided herein, RB may not assign this
Agreement without the written consent of WRI, which consent shall not
be unreasonably withheld. WRI may assign its rights under this
Agreement to a party acquiring WRI's rights in and to the Intellectual
Property.
GOVERNING LAW AND VENUE. This Agreement shall be governed by and construed
according to Oregon law, without regard to conflict of law principles
thereunder. The parties agree that all disputes relating to this
Agreement shall be tried before the courts of Oregon, with venue in
Multnomah County, Oregon, to the exclusion of all other courts that
might have jurisdiction except for this provision.
<PAGE>
PARAGRAPH HEADINGS. The paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
MODIFICATION. This Agreement may not be modified, altered or terminated except
by an instrument in writing signed by authorized representatives of
both parties.
ENTIRE AGREEMENT. The parties agree that all agreements and understandings
between them are embodied, expressed, and merged herein; and that this
Agreement states the entire agreement of the parties and supersedes all
prior and contemporaneous negotiations and agreements, oral or written,
relating to the subject matter of this Agreement. All prior and
contemporaneous negotiations and agreements relating to the subject
matter of this Agreement are deemed incorporated into this Agreement or
are deemed to have been abandoned if not so incorporated herein.
AGREEMENT BINDING. This Agreement and all of its terms shall be binding upon,
and shall inure to the benefit of, the parties and their respective
successors and permitted assigns.
SEVERABILITY. In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Agreement, but this Agreement shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein.
MULTIPLE COUNTERPARTS. This Agreement may be executed by the parties hereto in
multiple counterparts and each counterpart, when so executed, shall be
deemed an original, but all of which shall be considered as one
agreement.
FURTHER ASSURANCES. The parties hereto agree to execute all additional documents
and take all other action required to effectuate the purposes of this
Agreement.
NO JOINT VENTURE. Nothing contained in this Agreement shall be construed to
place the parties to this Agreement in the relationship of partners or
joint venturers, and neither party hereto shall have any power to
obligate or bind the other party hereto in any manner whatsoever,
except as otherwise provided for herein.
WAIVER. The failure of either party hereto to enforce, or the delay by either
party in enforcing, any of its rights hereunder shall not be deemed a
continuing waiver or a modification thereof and either party may,
within the time provided by applicable law, commence appropriate legal
proceedings to enforce any and all of such rights.
REMEDIES. All rights and remedies provided for herein shall be cumulative and in
addition to any other rights or remedies such parties may have at law
or in equity. Either party hereto may employ any of the remedies
available to it with respect to any of its rights hereunder without
prejudice to the use by it in the future of any other remedy with
respect to any of such rights.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this License Agreement to
be executed by their duly authorized representatives on the date first written
above.
WASTE RECOVERY, INC.
By:
---------------------------------------
Printed Name:
-----------------------------
Title:
------------------------------------
RB RECYCLING, INC.
By:
---------------------------------------
Printed Name:
-----------------------------
Title:
------------------------------------
<PAGE>
EXHIBIT "A"
INTELLECTUAL PROPERTY
Patent No. 4,374,573
Patent No. 4,560,112
Patent No. 4,714,201
<PAGE>
EXHIBIT 5.1
LEASES
<TABLE>
<CAPTION>
LESSOR PREMISES
- ------ --------
<S> <C>
1. EEEK, Limited Partnership Lots 1 through 10, Block 5, SWINTON, in the
City of Portland, County of Multnomah, State
of Oregon.
2. Arlene Glanz Lots 11 through 18 and Lots 27 through 36,
Block 5, Swinton Addition, Portland,
Multnomah County, Oregon. Lots 11 through
18, commonly known as 643 N. Argyle and also
known as 8501 N. Borthwick, Portland,
Oregon, and Lots 27 through 36 being located
on N. Hunt Street, Portland, Multnomah
County, Oregon (all of said described
property being contiguous and being 45,000
square feet (+/-)).
3. Marcia Delavan Lots 19 through 26, Block 5, Swinton
Addition, Portland, Multnomah County,
Oregon, commonly known as 8512 N. Albina
Avenue, Portland, Oregon.
</TABLE>
<PAGE>
EXHIBIT 7.2(A)
ASSIGNMENT AND BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, that, effective January _____, 1999,
Waste Recovery, Inc., a Texas corporation, ("Transferor") hereby sells,
transfers, assigns, and conveys to RB Recycling, Inc., an Oregon corporation
("Transferee"), and its successors and assigns, all of the right, title, and
interest of Transferor in and to the following assets owned by Transferor and
used by it in connection with the collection and shredding of waste tires in and
around Portland, Oregon for distribution to and further processing by
manufacturers, ("Business"):
(a) All vehicles, machinery, equipment, tools, supplies,
furniture, fixtures, and other personal property of Seller
used or useful in the Business, including but not limited to
the property identified in EXHIBIT 1.1(B);
(b) Raw materials and inventory;
(c) All goodwill (except for Seller's name), manuals, catalogs,
sales literature, files, records, customer lists, and other
intangible personal property of Seller used or useful in
connection with the operation of the Business.
Transferor hereby covenants and agrees that it will, from time to time,
if requested by Transferee, do, execute, acknowledge, and deliver to Transferee
such and all further acts, transfers, assignments, deeds, powers and assurances
of title, and additional documents and instruments as may be proper and
necessary for better assuring, conveying, transferring, and assigning all of the
property hereby conveyed, transferred, and assigned and to vest in Transferee
the entire right, title, and interest of Transferor in and to all of said
property, and Transferor will warrant and defend the same to Transferee, and its
successors and assigns, forever against all claims or demand whatsoever.
DATED AND AGREED as of the date first set forth above.
TRANSFEROR: TRANSFEREE:
Waste Recovery, Inc. RB Recycling, Inc.
By: By:
---------------------------- ------------------------------
PAUL GILSON
Its: Its: Executive Vice President
--------------------------
Date: Date:
------------------------- ---------------------------
<PAGE>
EXHIBIT 7.2(E)
UCC-3 TERMINATION STATEMENTS
<TABLE>
<CAPTION>
ORIGINAL FINANCING STATEMENT NO. SECURED PARTY
- -------------------------------- -------------
<S> <C>
1. 239159 Nationsbank of Georgia National
Association
2. 286476 Textron Financial Corporation
3. 290273 Textron Financial Corporation
4. 303590 Textron Financial Corporation
5. 306440 Safeco Credit Co, Inc.
6. 445839 Fidelity Funding, Inc.
</TABLE>
<PAGE>
EXHIBIT 7.3
ASSUMPTION AGREEMENT
This ASSUMPTION AGREEMENT is made this 29th day of January, 1999, by RB
RECYCLING, INC. ("Buyer") from WASTE RECOVERY, INC. ("Seller").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Agreement for Purchase and Sale of
Assets dated as of January 28th, 1999, by and between Buyer and Seller (the
"Asset Purchase Agreement"), Seller is to convey to Buyer and Buyer is to accept
and assume the Assets (other than the excluded assets as defined in Section 1.2
of the Asset Purchase Agreement) and certain liabilities as described in such
Asset Purchase Agreement (the "Liabilities");
NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer hereby agrees as follows:
1. ACCEPTANCE AND ASSUMPTION. Buyer hereby accepts the foregoing
assignment and transfer of the Assets, and Buyer hereby assumes and agrees to
pay, perform and discharge in due course the Liabilities as set forth in the
Asset Purchase Agreement.
2. FURTHER ASSURANCES. Buyer, at any time and from time to time, upon
the reasonable request of Seller, shall do, execute, acknowledge and deliver all
such further acts, deeds, assignments, transfers, conveyances, powers of
attorney and assurances as may be required to convey and transfer to Buyer the
Liabilities to be assumed hereunder.
3. HEADINGS. Headings are for convenience of reference only and shall
not in any manner affect the meaning or interpretation of this Assumption
Agreement.
4. ASSET PURCHASE AGREEMENT. This Assumption Agreement is entered into
pursuant to the Asset Purchase Agreement and is subject to the terms and
conditions thereof. Undefined capitalized terms will have the same meaning as
those terms have in the Asset Purchase Agreement.
5. GOVERNING LAW AND VENUE. This Agreement shall be governed by and
construed according to Oregon law, without regard to conflict of law principles
thereunder. The parties agree that all disputes relating to this Agreement shall
be tried before the courts of Oregon, with venue in Multnomah County, Oregon, to
the exclusion of all other courts that might have jurisdiction except for this
provision.
<PAGE>
IN WITNESS WHEREOF, Buyer has caused this Assumption Agreement to be
executed in its corporate name by its duly authorized officer, on the day and
year first above written.
BUYER:
RB RECYCLING, INC.
By:
-------------------------------------
Paul Gilson, Executive Vice-president
STATE OF OREGON )
)
COUNTY OF MULTNOMAH )
This instrument was acknowledged before me this _____ day of January,
1999, by Paul Gilson, Executive Vice-President of RB RECYCLING, INC., an Oregon
corporation, on behalf of said corporation.
-------------------------------------
Notary Public for the State of Oregon
My Commission Expires:
---------------
-------------------------------------
Printed Name of Notary
<PAGE>
PROMISSORY NOTE
<TABLE>
<CAPTION>
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$450,000.00 01-19-98 01-20-2004 5000009005 402 305 E121729 TLH12
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<S> <C>
BORROWER: R-B RUBBER PRODUCTS, INC. LENDER: KEYBANK NATIONAL ASSOCIATION
904 E. 10TH AVENUE WILLAMETTE VALLEY COMMERCIAL BANKING CENTER,
MCMINNVILLE, OR 97128 SALEM
416 STATE STREET
P.O. BOX 2246 OR-20-96-0158
SALEM, OR 97308
</TABLE>
*20000012172950000090050D20*
<TABLE>
<S> <C> <C>
PRINCIPAL AMOUNT: $450,000.00 INITIAL RATE: 7.750 DATE OF NOTE: JANUARY 19, 1999
</TABLE>
PROMISE TO PAY. R-B RUBBER PRODUCTS, INC. ("BORROWER") PROMISES TO PAY TO
KEYBANK NATIONAL ASSOCIATION ("LENDER"), OR ORDER, IN LAWFUL MONEY OF THE UNITED
STATES OF AMERICA, THE PRINCIPAL AMOUNT OF FOUR HUNDRED FIFTY THOUSAND & 00/100
DOLLARS ($450,000.00), TOGETHER WITH INTEREST ON THE UNPAID PRINCIPAL BALANCE
FROM JANUARY 19, 1999, UNTIL PAID IN FULL.
PAYMENT. SUBJECT TO ANY PAYMENT CHANGES RESULTING FROM CHANGES IN THE INDEX,
BORROWER WILL PAY THIS LOAN IN 60 PAYMENTS OF $9,095.60 EACH PAYMENT. BORROWER'S
FIRST PAYMENT IS DUE FEBRUARY 20, 1999, AND ALL SUBSEQUENT PAYMENTS ARE DUE ON
THE SAME DAY OF EACH MONTH AFTER THAT. BORROWER'S FINAL PAYMENT WILL BE DUE ON
JANUARY 20, 2004, AND WILL BE FOR ALL PRINCIPAL AND ALL ACCRUED INTEREST NOT YET
PAID. PAYMENTS INCLUDE PRINCIPAL AND INTEREST. Interest on this Note is computed
on a 365/360 simple interest basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, times the outstanding principal balance,
times the actual number of days the principal balance is outstanding. Borrower
will pay Lender at Lender's address shown above or at such other place as Lender
may designate in writing. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to principal,
and any remaining amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an index which is the Prime Rate announced by
Lender (the "Index"). The interest rate will change automatically and
correspondingly on the date of each announced change of the Index by Lender. The
Index is not necessarily the lowest rate charged by Lender on its loans and is
set by Lender in its sole discretion. If the Index becomes unavailable during
the term of this loan, the Lender may designate a substitute index after
notifying Borrower. Lender will tell Borrower the current Index rate upon
Borrower's request. Borrower understands that Lender may make loans based on
other rates as well. The interest rate change will not occur more often than
each day that the Index changes. THE INDEX CURRENTLY IS 7.750% PER ANNUM. THE
INTEREST RATE TO BE APPLIED TO THE UNPAID PRINCIPAL BALANCE OF THIS NOTE WILL BE
AT A RATE EQUAL TO THE INDEX, RESULTING IN AN INITIAL RATE OF 7.750% PER ANNUM.
Whenever increases occur in the interest rate, Lender, at its option, may do one
or more of the following: (a) increase Borrower's payments to ensure Borrower's
loan will pay off by its original final maturity date, (b) increase Borrower's
payments to cover accruing interest, (c) increase the number of Borrower's
payments, and (d) continue Borrower's payments at the same amount and increase
Borrower's final payment.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments under the payment schedule.
Rather, they will reduce the principal balance due and may result in Borrower
making fewer payments.
LATE CHARGE. If a payment is 16 DAYS OR MORE LATE, Borrower will be charged
5.000% OF THE REGULARLY SCHEDULED PAYMENT.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Borrower defaults under any loan, extension
<PAGE>
of credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
any of Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with Lender.
(g) Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A material
adverse change occurs in Borrower's financial condition, or Lender believes the
prospect of payment or performance of the Indebtedness is impaired.
If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within fifteen (15) days; or (b) if
the cure requires more than fifteen (15) days, immediately initiates steps which
Lender deems in Lender's sole discretion to be sufficient to cure the default
and thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the variable interest rate on this Note to 5.000
percentage points over the Index. The interest rate will not exceed the maximum
rate permitted by applicable law. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower also will pay Lender that
amount. This includes, subject to any limits under applicable law, Lender's
attorneys' fees and Lender's legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. THIS NOTE HAS BEEN DELIVERED TO
LENDER AND ACCEPTED BY LENDER IN THE STATE OF OREGON. IF THERE IS A LAWSUIT,
BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF MULTNOMAH COUNTY, THE STATE OF OREGON. LENDER AND BORROWER HEREBY
WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
BROUGHT BY EITHER
<PAGE>
01-19-1999 PROMISSORY NOTE PAGE 2
LOAN NO 5000009005 (CONTINUED)
LENDER OR BORROWER AGAINST THE OTHER. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OREGON.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan, or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY US (LENDER)
AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY US TO BE
ENFORCEABLE.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
R-B RUBBER PRODUCTS, INC.
BY: /s/ Signature Illegible
RONALD L. BOGH, PRESIDENT
<PAGE>
BUSINESS LOAN AGREEMENT
<TABLE>
<CAPTION>
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$450,000.00 01-19-1999 01-20-2004 5000009005 402 305 E121729 TLH12
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<S> <C>
BORROWER: R-B RUBBER PRODUCTS, INC. LENDER: KEYBANK NATIONAL ASSOCIATION
904 E. 10TH AVENUE WILLAMETTE VALLEY COMMERCIAL BANKING CENTER,
MCMINNVILLE, OR 97128 SALEM
416 STATE STREET
P.O. BOX 2246 OR-20-96-0158
SALEM, OR 97308
</TABLE>
*20000012172950000090050C40*
THIS BUSINESS LOAN AGREEMENT BETWEEN R-B RUBBER PRODUCTS, INC. ("BORROWER") AND
KEYBANK NATIONAL ASSOCIATION ("LENDER") IS MADE AND EXECUTED ON THE FOLLOWING
TERMS AND CONDITIONS. BORROWER HAS RECEIVED PRIOR COMMERCIAL LOANS FROM LENDER
OR HAS APPLIED TO LENDER FOR A COMMERCIAL LOAN OR LOANS AND OTHER FINANCIAL
ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED ON ANY EXHIBIT OR
SCHEDULE ATTACHED TO THIS AGREEMENT. ALL SUCH LOANS AND FINANCIAL
ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND FINANCIAL ACCOMMODATIONS FROM
LENDER TO BORROWER, ARE REFERRED TO IN THIS AGREEMENT INDIVIDUALLY AS THE "LOAN"
AND COLLECTIVELY AS THE "LOANS." BORROWER UNDERSTANDS AND AGREES THAT: (A) IN
GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS RELYING UPON BORROWER'S
REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET FORTH IN THIS AGREEMENT; (B)
THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT ALL TIMES SHALL BE
SUBJECT TO LENDER'S SOLE JUDGMENT AND DISCRETION; AND (C) ALL SUCH LOANS SHALL
BE AND SHALL REMAIN SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS OF THIS
AGREEMENT.
TERM. This Agreement shall be effective as of JANUARY 19, 1999, and shall
continue thereafter until all Indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
AGREEMENT. The word "Agreement" means this Business Loan Agreement, as
this Business Loan Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached to this
Business Loan Agreement from time to time.
BORROWER. The word "Borrower" means R-B RUBBER PRODUCTS, INC.. The
word "Borrower" also includes, as applicable, all subsidiaries and
affiliates of Borrower as provided below in the paragraph titled
"Subsidiaries and Affiliates."
CERCLA. The word "CERCLA" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
COLLATERAL. The word "Collateral" means and includes without
limitation all property and assets granted as collateral security for
a Loan, whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted
in the form of a security interest, mortgage, deed of trust,
assignment, pledge, chattel mortgage, chattel trust, factor's lien,
equipment trust, conditional sale, trust receipt, lien, charge, lien
or title retention contract, lease or consignment intended as a
security device, or any other security or lien interest whatsoever,
whether created by law, contract, or otherwise.
ERISA. The word "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
EVENT OF DEFAULT. The words "Event of Default" means and include
without limitation any of the Events of Default set forth below in the
section titled "EVENTS OF DEFAULT."
GRANTOR. The word "Grantor" means and includes without limitation each
and all of the persons or entities granting a Security Interest in any
Collateral for the Indebtedness, including without limitation all
Borrowers granting such a Security
<PAGE>
Interest.
GUARANTOR. The word "Guarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with any Indebtedness.
INDEBTEDNESS. The word "Indebtedness" means and includes without
limitation all Loans, together with all other obligations, debts and
liabilities of Borrower to Lender, or any one or more of them, as well
as all claims by Lender against Borrower, or any one or more of them;
whether now or hereafter existing, voluntary or involuntary, due or
not due, absolute or contingent, liquidated or unliquidated; whether
Borrower may be liable individually or jointly with others; whether
Borrower may be obligated as a guarantor, surety, or otherwise;
whether recovery upon such Indebtedness may be or hereafter may become
barred by any statute of limitations; and whether such Indebtedness
may be or hereafter may become otherwise unenforceable.
LENDER. The word "Lender" means KEYBANK NATIONAL ASSOCIATION, its
successors and assigns.
LOAN. The word "Loan" or "Loans" means and includes without limitation
any and all commercial loans and financial accommodations from Lender
to Borrower, whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations
described herein or described on any exhibit or schedule attached to
this Agreement from time to time.
NOTE. The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan
obligations in favor of Lender, as well as any substitute, replacement
or refinancing note or notes therefor.
PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and
security interests securing Indebtedness owned by Borrower to Lender;
(b) liens for taxes, assessments, or similar charges either not yet
due or being contested in good faith; (c) liens of materialmen,
mechanics, warehousemen, or carriers, or other like liens arising in
the ordinary course of business and securing obligations which are not
yet delinquent; (d) purchase money liens or purchase money security
interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure indebtedness outstanding on the
date of this Agreement or permitted to be incurred under the paragraph
of this Agreement titled "Indebtedness and Liens"; (e) liens and
security interests which, as of the date of this Agreement, have been
disclosed to and approved by the Lender in writing; and (f) those
liens and security interests which in the aggregate constitute an
immaterial and insignificant monetary amount with respect to the net
value of Borrower's assets.
RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
<PAGE>
01-19-1999 BUSINESS LOAN AGREEMENT PAGE 2
LOAN NO 5000009005 (CONTINUED)
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
SECURITY AGREEMENT. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract,
or otherwise, evidencing, governing, representing, or creating a
Security Interest.
SECURITY INTEREST. The words "Security Interest" mean and include
without limitation any type of collateral security, whether in the
form of a lien, charge, mortgage, deed of trust, assignment, pledge,
chattel mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien or title retention contract,
lease or consignment intended as a security device, or any other
security or lien interest whatsoever, whether created by law,
contract, or otherwise.
SARA. The word "SARA" means the Superfund Amendments and
Reauthorization Act of 1986 as now or hereafter amended.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.
LOAN DOCUMENTS. Borrower shall provide to Lender in form satisfactory
to Lender the following documents for the Loan: (a) the Note, (b)
Security Agreements granting to Lender security interests in the
Collateral, (c) Financing Statements perfecting Lender's Security
Interests; (d) evidence of insurance as required below; and (e) any
other documents required under this Agreement or by Lender or its
counsel.
BORROWER'S AUTHORIZATION. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and
the Related Documents, and such other authorizations and other
documents and instruments as Lender or its counsel, in their sole
discretion, may require.
PAYMENT OF FEES AND EXPENSES. Borrower shall have paid to Lender all
fees, charges, and other expenses which are then due and payable as
specified in this Agreement or any Related Document.
REPRESENTATIONS AND WARRANTIES. The representations and warranties set
forth in this Agreement, in the Related Documents, and in any document
or certificate delivered to Lender under this Agreement are true and
correct.
NO EVENT OF DEFAULT. There shall not exist at the time of any advance
a condition which would constitute an Event of Default under this
Agreement.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:
ORGANIZATION. Borrower is a corporation which is duly organized,
validly existing, and in good standing under the laws of the State of
Oregon and is validly existing and in good standing in all states in
which Borrower is doing business. Borrower has the full power and
authority to own its properties and to transact the businesses in
which it is presently engaged or presently proposes to engage.
Borrower also is duly qualified as a foreign corporation and is in
good standing in all states in which the failure to so qualify would
have a material adverse effect on its businesses or financial
condition.
AUTHORIZATION. The execution, delivery, and performance of this
Agreement and all Related Documents by Borrower, to the extent to be
executed, delivered or performed by Borrower, have been duly
authorized by all necessary action by Borrower; do not require the
consent or approval of any other person, regulatory authority or
governmental body; and do not conflict with, result in a violation of,
or constitute a default under (a) any provision of its articles of
incorporation or organization, or bylaws, or any agreement or other
instrument binding upon Borrower or (b) any law, governmental
regulation, court decree, or order applicable to Borrower.
<PAGE>
FINANCIAL INFORMATION. Each financial statement of Borrower supplied
to Lender truly and completely disclosed Borrower's financial
condition as of the date of the statement, and there has been no
material adverse change in Borrower's financial condition subsequent
to the date of the most recent financial statement supplied to Lender.
Borrower has no material contingent obligations except as disclosed in
such financial statements.
LEGAL EFFECT. This Agreement constitutes, and any instrument or
agreement required hereunder to be given by Borrower when delivered
will constitute, legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with their respective
terms.
PROPERTIES. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender
and as accepted by Lender, and except for property tax liens for taxes
not presently due and payable, Borrower owns and has good title to all
of Borrower's properties free and clear of all Security Interests, and
has not executed any security documents or financing statements
relating to such properties. All of Borrower's properties are titled
in Borrower's legal name, and Borrower has not used, or filed a
financing statement under, any other name for at least the last five
(5) years.
HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous
substance," "disposal," "release," and "threatened release," as used
in this Agreement, shall have the same meanings as set forth in the
"CERCLA," "SARA," the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq., or other applicable state or
Federal laws, rules, or regulations adopted pursuant to any of the
foregoing or intended to protect human health or the environment
("Environmental Laws"). Except as disclosed to and acknowledged by
Lender in writing, Borrower represents and warrants that: (a) During
the period of Borrower's ownership of the properties, there has been
no use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any hazardous waste or substance by any
person on, under, about or from any of the properties. (b) Borrower
has no knowledge of, or reason to believe that there has been (i) any
use, generation, manufacture, storage, treatment, disposal, release,
or threatened release of any hazardous waste or substance on, under,
about or from the properties by any prior owners or occupants of any
of the properties, or (ii) any actual or threatened litigation or
claims of any kind by any person relating to such matters. (c) Neither
Borrower nor any tenant, contractor, agent or other authorized user of
any of the properties shall use, generate, manufacture, store, treat,
dispose of, or release any hazardous waste or substance on, under,
about or from any of the properties; and any such activity shall be
conducted in compliance with all applicable federal, state, and local
laws, regulations, and ordinances, including without limitation
Environmental Laws. Borrower authorizes Lender and its agents to enter
upon the properties to make such inspections and tests as Lender may
deem appropriate to determine compliance of the properties with this
section of the Agreement. Any inspections or tests made by Lender
shall be at Borrower's expens and for Lender's purposes only and shall
not be construed to create any responsibility or liability on the part
of Lender to Borrower or to any other person. The representations and
warranties contained herein are based on Borrower's due diligence in
investigating the properties for hazardous waste and hazardous
substances. Borrower hereby (a) releases and waives any future claims
against Lender for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs under any such laws, and (b)
agrees to indemnify and hold harmless Lender against any and all
claims, losses, liabilities, damages, penalties, and expenses which
Lender may directly or indirectly sustain or suffer resulting from a
breach of this section of the Agreement or as a consequence of any
use, generation, manufacture, storage, disposal, release or threatened
release of a hazardous waste or substance on the properties, or as a
result of a violation of any Environmental Laws. The provisions of
this section of the Agreement, including the obligation to indemnify,
shall survive the payment of the Indebtedness and the termination or
expiration of this Agreement and shall not be affected by Lender's
acquisition of any interest in any of the properties, whether by
foreclosure or otherwise.
<PAGE>
01-19-1999 BUSINESS LOAN AGREEMENT PAGE 3
LOAN NO 5000009005 (CONTINUED)
LITIGATION AND CLAIMS. No litigation, claim, investigation,
administrative proceeding or similar action (including those for
unpaid taxes) against Borrower is pending or threatened, and no other
event has occurred which may materially adversely affect Borrower's
financial condition or properties, other than litigation, claims, or
other events, if any, that have been disclosed to and acknowledged by
Lender in writing.
TAXES. To the best of Borrower's knowledge, all tax returns and
reports of Borrower that are or were required to be filed, have been
filed, and all taxes, assessments and other governmental charges have
been paid in full, except those presently being or to be contested by
Borrower in good faith in the ordinary course of business and for
which adequate reserves have been provided.
LIEN PRIORITY. Unless otherwise previously disclosed to Lender in
writing, Borrower has not entered into or granted any Security
Agreements, or permitted the filing or attachment of any Security
Interests on or affecting any of the Collateral directly or indirectly
securing repayment of Borrower's Loan and Note, that would be prior or
that may in any way be superior to Lender's Security Interests and
rights in and to such Collateral.
BINDING EFFECT. This Agreement, the Note, all Security Agreements
directly or indirectly securing repayment of Borrower's Loan and Note
and all of the Related Documents are binding upon Borrower as well as
upon Borrower's successors, representatives and assigns, and are
legally enforceable in accordance with their respective terms.
COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely
for business or commercial related purposes.
EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which
Borrower may have any liability complies in all material respects with
all applicable requirements of law and regulations, and (i) no
Reportable Event nor Prohibited Transaction (as defined in ERISA) has
occurred with respect to any such plan, (ii) Borrower has not
withdrawn from any such plan or initiated steps to do so, (iii) no
steps have been taken to terminate any such plan, and (iv) there are
no unfunded liabilities other than those previously disclosed to
Lender in writing.
LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of
business, or Borrower's Chief executive office, if Borrower has more
than one place of business, is located at 904 E. 10TH AVENUE,
MCMINNVILLE, OR 97128. Unless Borrower has designated otherwise in
writing this location is also the office or offices where Borrower
keeps its records concerning the Collateral.
YEAR 2000. Borrower warrants and represents that all software utilized
in the conduct of Borrower's business will have appropriate
capabilities and compatibility for operation to handle calendar dates
falling on or after January 1, 2000, and all information pertaining to
such calendar dates, in the same manner and with the same
functionality as the software does respecting calendar dates falling
on or before December 31, 1999. Further, Borrower warrants and
represents that the data-related user interface functions,
data-fields, and data-related program instructions and functions of
the software include the indication of the century.
INFORMATION. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender
will be, true and accurate in every material respect on the date as of
which such information is dated or certified; and none of such
information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and
agrees that Lender, without independent investigation, is relying upon
the above representations and warranties in making the above
referenced Loan to Borrower. Borrower further agrees that the
foregoing representations and warranties shall be continuing in nature
and shall remain in full force and effect until such time as
Borrower's Indebtedness shall be paid in full, or until this Agreement
shall be terminated in the manner provided above, whichever is the
last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
<PAGE>
LITIGATION. Promptly inform Lender in writing of (a) all material
adverse changes in Borrower's financial condition, and (b) all
existing and all threatened litigation, claims, investigations,
administrative proceedings or similar actions affecting Borrower or
any Guarantor which could materially affect the financial condition of
Borrower or the financial condition of any Guarantor.
FINANCIAL RECORDS. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent
basis, and permit Lender to examine and audit Borrower's books and
records at all reasonable times.
FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but
in no event later than one hundred twenty (120) days after the end of
each fiscal year, Borrower's balance sheet and income statement for
the year ended, audited by a certified public accountant satisfactory
to Lender, and, as soon as available, but in no event later than
thirty (30) days after the end of each fiscal quarter, Borrower's
balance sheet and profit and loss statement for the period ended,
prepared and certified as correct to the best knowledge and belief by
Borrower's chief financial officer or other officer or person
acceptable to Lender. All financial reports required to be provided
under this Agreement shall be prepared in accordance with generally
accepted accounting principles, applied on a consistent basis, and
certified by Borrower as being true and correct.
ADDITIONAL INFORMATION. Furnish such additional information and
statements, lists of assets and liabilities, agings of receivables and
payables, inventory schedules, budgets, forecasts, tax returns, and
other reports with respect to Borrower's financial condition and
business operations as Lender may request from time to time.
INSURANCE. Maintain fire and other risk Insurance, public liability
insurance, and such other insurance as Lender may require with respect
to Borrower's properties and operations, in form, amounts, coverages
and with insurance companies reasonably acceptable to Lender.
Borrower, upon request of Lender, will deliver to Lender from time to
time the policies or certificates of insurance in form satisfactory to
Lender, including stipulations that coverages will not be cancelled or
diminished without at least ten (10) days' prior written notice to
Lender. Each insurance policy also shall include an endorsement
providing that coverage in favor of Lender will not be impaired in any
way by any act, omission or default of Borrower or any other person.
In connection with all policies covering assets in which Lender holds
or is offered a security interest for the Loans, Borrower will provide
Lender with such loss payable or other endorsements as Lender may
require.
INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports
on each existing insurance policy showing such information as Lender
may reasonably request, including without limitation the following:
(a) the name of the insurer; (b) the risks insured; (c) the amount of
the policy; (d) the properties insured; (e) the then current property
values on the basis of which insurance has been obtained, and the
manner of determining those values; and (f) the expiration date of the
policy. In addition, upon request of Lender (however not more often
than annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value
or replacement cost of any Collateral. The cost of such appraisal
shall be paid by Borrower.
OTHER AGREEMENTS. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and
any other party and notify Lender immediately in writing of any
default in connection with any other such agreements.
LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender in
writing.
TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower or its properties, income, or
profits, prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a lien or charge upon any
of Borrower's properties,
<PAGE>
01-19-1999 BUSINESS LOAN AGREEMENT PAGE 4
LOAN NO 5000009005 (CONTINUED)
income, or profits. Provided however, Borrower will not be required to
pay and discharge any such assessment, tax, charge, levy, lien or
claim so long as (a) the legality of the same shall be contested in
good faith by appropriate proceedings, and (b) Borrower shall have
established on its books adequate reserves with respect to such
contested assessment, tax, charge, levy, lien, or claim in accordance
with generally accepted accounting practices. Borrower, upon demand of
Lender, will furnish to Lender evidence of payment of the assessments,
taxes, charges, levies, liens and claims and will authorize the
appropriate governmental official to deliver to Lender at any time a
written statement of any assessments, taxes, charges, levies, liens
and claims against Borrower's properties, income, or profits.
PERFORMANCE. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in the Related Documents in
a timely manner, and promptly notify Lender if Borrower learns of the
occurrence of any event which constitutes an Event of Default under
this Agreement or under any of the Related Documents.
OPERATIONS. Maintain executive and management personnel with
substantially the same qualifications and experience as the present
executive and management personnel; provide written notice to Lender
of any change in executive and management personnel; conduct its
business affairs in a reasonable and prudent manner and in compliance
with all applicable federal, state and municipal laws, ordinances,
rules and regulations respecting its properties, charters, businesses
and operations, including without limitation, compliance with the
Americans With Disabilities Act and with all minimum funding standards
and other requirements of ERISA and other laws applicable to
Borrower's employee benefit plans.
INSPECTION. Permit employees or agents of Lender at any reasonable
time to inspect any and all Collateral for the Loan or Loans and
Borrower's other properties and to examine or audit Borrower's books,
accounts, and records and to make copies and memoranda of Borrower's
books, accounts, and records. If Borrower now or at any time hereafter
maintains any records (including without limitation computer generated
records and computer software programs for the generation of such
records) in the possession of a third party, Borrower, upon request of
Lender, shall notify such party to permit Lender free access to such
records at all reasonable times and to provide Lender with copies of
any records it may request, all at Borrower's expense.
COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide
Lender at least annually and at the time of each disbursement of Loan
proceeds with a certificate executed by Borrower's chief financial
officer, or other officer or person acceptable to Lender, certifying
that the representations and warranties set forth in this Agreement
are true and correct as of the date of the certificate and further
certifying that, as of t he date of the certificate, no Event of
Default exists under this Agreement.
ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all
respects with all environmental protection federal, state and local
laws, statutes, regulations and ordinances; not cause or permit to
exist, as a result of an intentional or unintentional action or
omission on its part or on the part of any third party, on property
owned and/or occupied by Borrower, any environmental activity where
damage may result to the environment, unless such environmental
activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within
thirty (30) days after receipt thereof a copy of any notice, summons,
lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower's part in connection with
any environmental activity whether or not there is damage to the
environment and/or other natural resources.
ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
financing statements, instruments, documents and other agreements as
Lender or its attorneys may reasonably request to evidence and secure
the Loans and to perfect all Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the
normal course of business and indebtedness to Lender contemplated by
this Agreement, create, incur or assume indebtedness for borrowed
money, including capital leases, (b) except as
<PAGE>
allowed as a Permitted Lien, sell, transfer, mortgage, assign, pledge,
lease, grant a security interest in, or encumber any of Borrower's
assets, or (c) sell with recourse any of Borrower's accounts, except
to Lender.
CONTINUITY OF OPERATIONS. (a) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (b) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change ownership, change its name,
dissolve or transfer or sell Collateral out of the ordinary course of
business, (c) pay any dividends on Borrower's stock (other than
dividends payable in its stock), provided, however that
notwithstanding the foregoing, but only so long as no Event of Default
has occurred and is continuing or would result from the payment of
dividends, if Borrower is a "Subchapter S Corporation" (as defined in
the Internal Revenue Code of 1986, as amended), Borrower may pay cash
dividends on its stock to its shareholders from time to time in
amounts necessary to enable the shareholders to pay income taxes and
make estimated income tax payments to satisfy their liabilities under
federal and state law which arise solely from their status as
Shareholders of a Subchapter S Corporation because of their ownership
of shares of stock of Borrower, or (d) purchase or retire any of
Borrower's outstanding shares or alter or amend Borrower's capital
structure.
LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance
money or assets, (b) purchase, create or acquire any interest in any
other enterprise or entity, or (c) incur any obligation as surety or
guarantor other than in the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; or (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender.
ADDITIONAL DEFINITIONS.
ADJUSTED TANGIBLE CAPITAL means Tangible Capital less investments in, advances
to, promissory notes and any receivables from, any affiliate or other related
entity of Borrower.
CAPITAL EXPENDITURES means current period net fixed assets less prior period net
fixed assets, plus current period depreciation.
CASH FLOW means net income after taxes, and exclusive of extraordinary gains and
income, plus depreciation and amortization.
CURRENT ASSETS shall be as defined by GAAP, minus prepaid expenses.
CURRENT LIABILITIES shall be as defined by GAAP
DEBT means all of Borrower's liabilities excluding Subordinated Debt
EBITDA means, calculated for the period of the previous four fiscal quarters,
the net earnings of Borrower plus the aggregate amounts deducted in determining
such net income in respect of interest expenses, taxes, depreciation and
amortization; but not, however, giving effect to extraordinary losses or gains
in calculating net income.
<PAGE>
01-19-1999 BUSINESS LOAN AGREEMENT PAGE 5
LOAN NO 5000009005 (CONTINUED)
FIXED CHARGES means interest expense plus lease expense, current maturities of
long-term debt and current maturities of capital leases.
FUNDED DEBT means all interest bearing term loan Debt or capital lease payments
of Borrower having a maturity of greater than one year.
LIQUID ASSETS means Borrower's cash on hand plus Borrower's readily marketable
securities.
OPERATING CASH FLOW means net income after taxes, and exclusive of extraordinary
gains, gains on asset sales, and other income, plus depreciation and
amortization, plus interest expense, plus lease expense, less dividends, and
distributions.
SUBORDINATED DEBT means indebtedness and liabilities of Borrower which have been
subordinated by written agreement to indebtedness owned by Borrower to Lender in
form and substance acceptable to Lender.
TANGIBLE CAPITAL means Tangible Net Worth plus Subordinated Debt
TANGIBLE NET WORTH means Borrower's total assets excluding all intangible assets
(i.e., goodwill, trademarks, patents, copyrights, organizational expenses, and
similar intangible items, but including leaseholds and leasehold improvements)
less total Debt.
TOTAL FIXED CHARGES means interest expense, plus current maturities of long-term
debt and current maturities of capital leases, plus lease expenses, plus
preferred stock dividends, plus Capital Expenditures.
TOTAL LIQUID ASSETS means Borrower's cash on hand plus Borrower's readily
marketable securities, plus Borrower's net trade accounts receivable.
TOTAL SENIOR LIABILITIES means total liabilities less Subordinated Debt.
UNENCUMBERED LIQUIDITY means the sum of unpledged cash, stocks, bonds, and other
near cash investments held in a person's name and immediately available with
unimpaired value; but not including pledged assets, IRA, 401(k), annuity or
trust accounts.
WORKING CAPITAL means Borrower's current assets, excluding prepaid expenses,
less Borrower's current liabilities.
ADDITIONAL COVENANTS. Borrower covenants and agrees with Lender that, while this
Agreement is in effect, Borrower will:
TANGIBLE NET WORTH. Borrower shall maintain a Tangible Net Worth of not less
than $4,500,000.00; calculated at the end of each QUARTER.
CURRENT RATIO. Borrower shall maintain a ratio of current assets to current
liabilities in excess of 1.50 to 1.00; calculated at the end of each QUARTER.
FUNDED DEBT TO EBITDA RATIO. Borrower shall maintain a ratio of Funded Debt to
EBITDA of not greater than 1.30 to 1.00; calculated for the period of the
previous four financial quarters as at the end of each FISCAL YEAR END.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when
due on the Loans.
OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or
to perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or
failure of Borrower to comply with or to perform any other term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower's
property or Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Agreement or any of
the Related Documents.
<PAGE>
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under
this Agreement or the Related Documents is false or misleading in any
material respect at the time made or furnished, or becomes false or
misleading at any time thereafter.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any Security Agreement to create a valid and perfected Security
Interest) at any time and for any reason.
INSOLVENCY. The dissolution or termination of Borrower's existence as
a going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower's property, any assignment for the
benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws
by or against Borrower.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any
creditor of any Grantor against any collateral securing the
Indebtedness, or by any governmental agency. This includes a
garnishment, attachment, or levy on or of any of Borrower's deposit
accounts with Lender. However, this Event of Default shall not apply
if there is a good faith dispute by Borrower or Grantor, as the case
may be, as to the validity or reasonableness of the claim which is the
basis of the creditor or forfeiture proceeding, and if Borrower or
Grantor given Lender written notice of the creditor or forfeiture
proceeding and furnishes reserves or a surety bond for the creditor or
forfeiture proceeding satisfactory to Lender.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor
dies or beco mes incompetent, or revokes or disputes the validity of,
or liability under, any Guaranty of the Indebtedness. Lender, at its
option, may, but shall not be required to, permit the Guarantor's
estate to assume unconditionally the obligations arising under the
guaranty in a manner satisfactory to Lender, and, in doing so, cure
the Event of Default.
CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
ADVERSE CHANGE. A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment or
performance of the Indebtedness is impaired.
RIGHT TO CURE. If any default, other than a Default on Indebtedness,
is curable and if Borrower or Grantor, as the case may be, has not
been given a notice of a similar default within the preceding twelve
(12) months, it may be cured (and no Event of Default will have
occurred) if Borrower or Grantor, as the case may be, after receiving
written notice from Lender demanding cure of such default: (a) cures
the default within fifteen (15) days; or (b) if the cure requires more
than fifteen (15) days, immediately initiates steps which Lender deems
in Lender's sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.
EFFECT OF AN EVENT OF DEFAULT. If any of Event of Default shall occur, except
where otherwise provided in this Agreement or the Related Documents, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate and, at Lender's
option, all Indebtedness immediately will become due and payable, all without
notice of any kind to Borrower, except that in the case of an Event of Default
of the type described in the "Insolvency" subsection above, such acceleration
shall be automatic and not optional. In addition, Lender shall have all the
rights and remedies provided in the Related Documents or available at law, in
equity, or otherwise. Except as may
<PAGE>
01-19-1999 BUSINESS LOAN AGREEMENT PAGE 6
LOAN NO 5000009005 (CONTINUED)
be prohibited by applicable law, all of Lender's rights and remedies shall be
cumulative and may be exercised singularly or concurrently. Election by Lender
to pursue any remedy shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation of
Borrower or of any Grantor shall not affect Lender's right to declare a default
and to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire and final understanding and agreement of the
parties as to the matters set forth in this Agreement. No alteration
of or amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.
APPLICABLE LAW. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND
ACCEPTED BY LENDER IN THE STATE OF OREGON. IF THERE IS A LAWSUIT,
BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF
THE COURTS OF MULTNOMAH COUNTY, THE STATE OF OREGON. LENDER AND
BORROWER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER
AGAINST THE OTHER. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF OREGON.
CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Borrower
under this Agreement shall be joint and several, and all references to
Borrower shall mean each and every Borrower. This means that each of
the persons signing below is responsible for all obligations in this
Agreement.
CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to
Lender's sale or transfer, whether now or later, of one or more
participation interests in the Loans to one or more purchasers,
whether related or unrelated to Lender. Lender may provide, without
any limitation whatsoever, to any one or more purchasers, or potential
purchasers, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower
hereby waives any rights to privacy it may have with respect to such
matters. Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of
such participation interests. Borrower also agrees that the purchasers
of any such participation interests will be considered as the absolute
owners of such interests in the Loans and will have all the rights
granted under the participation agreement or agreements governing the
sale of such participation interests. Borrower further waives all
rights of offset or counterclaim that it may have now or later against
Lender or against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may
enforce Borrower's obligation under the Loans irrespective of the
failure or insolvency of any holder of any interest in the Loans.
Borrower further agrees that the purchaser of any such participation
interests may enforce its interests irrespective of any personal
claims or defenses that Borrower may have against Lender.
COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
expenses, including without limitation attorneys' fees, incurred in
connection with the preparation, execution, enforcement, modification
and collection of this Agreement or in connection with the Loans made
pursuant to this Agreement. Lender may pay someone else to help
collect the Loans and to enforce this Agreement, and Borrower will pay
that amount. This includes, subject to any limits under applicable
law, Lender's attorneys' fees and Lender's legal expenses, whether or
not there is a lawsuit, including attorneys' fees for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post-judgment collection
services. Borrower also will pay any court costs, in addition to all
other sums provided by law.
NOTICES. All notices required to be given under this Agreement shall
be given in writing, may be sent by telefacsimile (unless otherwise
required by law), and shall be effective when actually delivered or
when deposited with a nationally recognized overnight courier or
deposited in the United States mail, first class, postage prepaid,
addressed to the party to whom the notice is to be given at the
address shown above. Any party may change its address for notices
under this Agreement by
<PAGE>
giving formal written notice to the other parties, specifying that the
purpose of the notice is to change the party's address. To the extent
permitted by applicable law, if there is more than one Borrower,
notice to any Borrower will constitute notice to all Borrowers. For
notice purposes, Borrower will keep Lender informed at all times of
Borrower's current address(es).
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified to be
within the limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be stricken and
all other provisions of this Agreement in all other respects shall
remain valid and enforceable.
SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of
any provisions of this Agreement makes it appropriate, including
without limitation any representation, warranty or covenant, the word
"Borrower" as used herein shall include all subsidiaries and
affiliates of Borrower. Notwithstanding the foregoing however, under
no circumstances shall this Agreement be construed to require Lender
to make any Loan or other financial accommodation to any subsidiary or
affiliate of Borrower.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or
on behalf of Borrower shall bind its successors and assigns and shall
inure to the benefit of Lender, its successors and assigns. Borrower
shall not, however, have the right to assign its rights under this
Agreement or any interest therein, without the prior written consent
of Lender.
SURVIVAL. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other instrument
delivered by Borrower to Lender under this Agreement shall be
considered to have been relied upon by Lender and will survive the
making of the Loan and delivery to Lender of the Related Documents,
regardless of any investigation made by Lender or on Lender's behalf.
WAIVER. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any
right shall operate as a waiver of such right or any other right. A
waiver by Lender of a provision of this Agreement shall not prejudice
or constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this
Agreement. No prior waiver by Lender, nor any course of dealing
between Lender and Borrower, or between Lender and any Grantor, shall
constitute a waiver of any of Lender's rights or of any obligations of
Borrower or of any Grantor as to any future transactions. Whenever the
consent of Lender is required under this Agreement, the granting of
such consent by Lender in any instance shall not constitute continuing
consent in subsequent instances where such consent is required, and in
all cases such consent may be granted or withheld in the sole
discretion of Lender.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY US (LENDER)
AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY US TO BE
ENFORCEABLE.
<PAGE>
01-19-1999 BUSINESS LOAN AGREEMENT PAGE 7
LOAN NO 5000009005 (CONTINUED)
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
JANUARY 19, 1999.
BORROWER:
R-B RUBBER PRODUCTS, INC.
BY: /s/ Signature Illegible
RONALD L. BOGH, PRESIDENT
LENDER:
KEYBANK NATIONAL ASSOCIATION
BY: /s/ Signature Illegible
AUTHORIZED OFFICER
<PAGE>
COMMERCIAL SECURITY AGREEMENT
<TABLE>
<CAPTION>
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$450,000.00 01-19-1999 01-20-2004 5000009005 402 305 E121729 TLH12
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<S> <C>
BORROWER: R-B RUBBER PRODUCTS, INC. LENDER: KEYBANK NATIONAL ASSOCIATION
904 E. 10TH AVENUE WILLAMETTE VALLEY COMMERCIAL BANKING CENTER,
MCMINNVILLE, OR 97128 SALEM
416 STATE STREET
P.O. BOX 2246 OR-20-96-0158
SALEM, OR 97308
</TABLE>
*20000012172950000090050E40*
THIS COMMERCIAL SECURITY AGREEMENT IS ENTERED INTO BETWEEN R-B RUBBER PRODUCTS,
INC. (REFERRED TO BELOW AS "GRANTOR"); AND KEYBANK NATIONAL ASSOCIATION
(REFERRED TO BELOW AS "LENDER"). FOR VALUABLE CONSIDERATION, GRANTOR GRANTS TO
LENDER A SECURITY INTEREST IN THE COLLATERAL TO SECURE THE INDEBTEDNESS AND
AGREES THAT LENDER SHALL HAVE THE RIGHTS STATED IN THIS AGREEMENT WITH RESPECT
TO THE COLLATERAL, IN ADDITION TO ALL OTHER RIGHTS WHICH LENDER MAY HAVE BY LAW.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
AGREEMENT. The word "Agreement" means this Commercial Security
Agreement, as this Commercial Security Agreement may be amended or
modified from time to time, together with all exhibits and schedules
attached to this Commercial Security Agreement from time to time.
COLLATERAL. The word "Collateral" means the following described
property of Grantor, whether now owned or hereafter acquired, whether
now existing or hereafter arising, and wherever located:
ALL EQUIPMENT, TOGETHER WITH THE FOLLOWING SPECIFICALLY DESCRIBED
PROPERTY: THE ATTACHED APPRAISALS LISTING SPECIFIC EQUIPMENT
In addition, the word "Collateral" includes all the following, whether
now owned or hereafter acquired, whether now existing or hereafter
arising, and wherever located:
(a) All attachments, accessions, accessories, tools, parts,
supplies, increases, and additions to and all replacements of and
substitutions for any property described above.
(b) All products and produce of any of the property described in
this Collateral section.
(c) All accounts, general intangibles, instruments, rents,
monies, payments, and all other rights, arising out of a sale,
lease, or other disposition of any of the property described in
this Collateral section.
(d) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property
described in this Collateral section.
(e) All records and data relating to any of the property
described in this Collateral section, whether in the form of a
writing, photograph, microfilm, microfiche, or electronic media,
together with all of Grantor's right, title, and interest in and
to all computer software required to utilize, create, maintain,
and process any such records or data on electronic media.
EVENT OF DEFAULT. The words "Event of Default" mean and include
without limitation any of the Events of Default set forth below in the
section titled "Events of Default."
GRANTOR. The word "Grantor" means R-B RUBBER PRODUCTS, INC., its
successors and
<PAGE>
assigns
GUARANTOR. The word "Guarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with the Indebtedness.
INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced
by the Note, including all principal and interest, together with all
other indebtedness and costs and expenses for which Grantor is
responsible under this Agreement or under any of the Related
Documents. In addition, the word "Indebtedness" includes all other
obligations, debts and liabilities, plus interest thereon, of Grantor,
or any one or more of them, to Lender, as well as all claims by Lender
against Grantor, or any one or more of them, whether existing now or
later; whether they are voluntary or involuntary, due or not due,
direct or indirect, absolute or contingent, liquidated or
unliquidated; whether Grantor may be liable individually or jointly
with others; whether Grantor may be obligated as guarantor, surety,
accommodation party or otherwise; whether recovery upon such
indebtedness may be or hereafter may become barred by any statute of
limitations; and whether such indebtedness may be or hereafter may
become otherwise unenforceable.
LENDER. The word "Lender" means KEYBANK NATIONAL ASSOCIATION, its
successors and assigns.
NOTE. The word "Note" means the note or credit agreement dated January
19, 1999, in the principal amount of $450,000.00 from R-B RUBBER
PRODUCTS, INC. to Lender, together with all renewals of, extensions
of, modifications of, refinancings of, consolidations of and
substitutions for the note or credit agreement.
RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender as follows:
PERFECTION OF SECURITY INTEREST. Grantor agrees to execute such
financing statements and to take whatever other actions are requested
by Lender to perfect and continue Lender's security interest in the
Collateral. Upon request of Lender, Grantor will deliver to Lender any
and all of the documents evidencing or constituting the Collateral,
and Grantor will note Lender's interest upon any and all chattel paper
if not delivered to
<PAGE>
01-19-1999 COMMERCIAL SECURITY AGREEMENT PAGE 2
LOAN NO 5000009005 (CONTINUED)
Lender for possession by Lender. Grantor hereby appoints Lender as its
irrevocable attorney-in-fact for the purpose of executing any
documents necessary to perfect or to continue the security interest
granted in this Agreement. Lender may at any time, and without further
authorization from Grantor, file a carbon, photographic or other
reproduction of any financing statement or of this Agreement for use
as a financing statement. Grantor will reimburse Lender for all
expenses for the perfection and the continuation of the perfection of
Lender's security interest in the Collateral. Grantor promptly will
notify Lender before any change in Grantor's name including any change
to the assumed business names of Grantor. THIS IS A CONTINUING
SECURITY AGREEMENT AND WILL CONTINUE IN EFFECT EVEN THOUGH ALL OR ANY
PART OF THE INDEBTEDNESS IS PAID IN FULL AND EVEN THOUGH FOR A PERIOD
OF TIME GRANTOR MAY NOT BE INDEBTED TO LENDER.
NO VIOLATION. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor is
a party, and its certificate or articles or incorporation and bylaws
do not prohibit any term or condition of this Agreement.
ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, the Collateral is
enforceable in accordance with its terms, is genuine, and complies
with applicable laws concerning form, content and manner of
preparation and execution, and all persons appearing to be obligated
on the Collateral have authority and capacity to contract and are in
fact obligated as they appear to be on the Collateral.
REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the
extent the Collateral consists of intangible property such as
accounts, the records concerning the Collateral) at Grantor's address
shown above, or at such other locations as are acceptable to Lender.
Except in the ordinary course of its business, including the sales of
inventory, Grantor shall not remove the Collateral from its existing
locations without the prior written consent of Lender. To the extent
that the Collateral consists of vehicles, or other titled property,
Grantor shall not take or permit any action which would require
application for certificates of title for the vehicles outside the
State of Oregon, without the prior written consent of Lender.
TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or
accounts collected in the ordinary course of Grantor's business,
Grantor shall not sell, offer to sell, or otherwise transfer or
dispose of the Collateral. Grantor shall not pledge, mortgage,
encumber or otherwise permit the Collateral to be subject to any lien,
security interest, encumbrance, or charge, other than the security
interest provided for in this Agreement, without the prior written
consent of Lender. This includes security interests even if junior in
right to the security interests granted under this Agreement. Unless
waived by Lender, all proceeds from any disposition of the Collateral
(for whatever reason) shall be held in trust for Lender and shall not
be commingled with any other funds; provided however, this requirement
shall not constitute consent by Lender to any sale or other
disposition. Upon receipt, Grantor shall immediately deliver any such
proceeds to Lender.
TITLE. Grantor represents and warrants to Lender that it holds good
and marketable title to the Collateral, free and clear of all liens
and encumbrances except for the lien of this Agreement. No financing
statement covering any of the Collateral is on file in any public
office other than those which reflect the security interest created by
this Agreement or to which Lender has specifically consented. Grantor
shall defend Lender's rights in the Collateral against the claims and
demands of all other persons.
COLLATERAL SCHEDULES AND LOCATIONS. Insofar as the Collateral consists
of equipment, Grantor shall deliver to Lender, as often as Lender
shall require, such lists, descriptions, and designations of such
Collateral as Lender may require to identify the nature, extent, and
location of such Collateral. Such information shall be submitted for
Grantor and each of its subsidiaries or related companies.
MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all
tangible Collateral in good condition and repair. Grantor will not
commit or permit damage to or destruction of the Collateral or any
part of the Collateral. Lender and its designated representatives and
agents shall have the right at all reasonable times to examine,
inspect, and audit the Collateral wherever located. Grantor shall
immediately notify Lender of all cases involving the return,
rejection, repossession, loss or damage of or to any Collateral; of
any request for credit or adjustment or of
<PAGE>
any other dispute arising with respect to the Collateral; and
generally of all happenings and events affecting the Collateral or the
value or the amount of the Collateral.
TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
assessments and liens upon the Collateral, its use or operation, upon
this Agreement, upon any promissory note or notes evidencing the
Indebtedness, or upon any of the other Related Documents. Grantor may
withhold any such payment or may elect to contest any lien if Grantor
is in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long as Lender's interest in the Collateral
is not jeopardized in Lender's sole opinion. If the Collateral is
subjected to a lien which is not discharged within fifteen (15) days,
Grantor shall deposit with Lender cash, a sufficient corporate surety
bond or other security satisfactory to Lender in an amount adequate to
provide for the discharge of the lien plus any interest, costs,
attorneys' fees or other charges that could accrue as a result of
foreclosure or sale of the Collateral. In any contest Grantor shall
defend itself and Lender and shall satisfy any final adverse judgment
before enforcement against the Collateral. Grantor shall name Lender
as an additional obligee under any surety bond furnished in the
contest proceedings.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply
promptly with all laws, ordinances, rules and regulations of all
governmental authorities, now or hereafter in effect, applicable to
the ownership, production, disposition, or use of the Collateral.
Grantor may contest in good faith any such law, ordinance or
regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Lender's interest in the Collateral,
in Lender's opinion, is not jeopardized.
HAZARDOUS SUBSTANCES. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this Agreement
remains a lien on the Collateral, used for the generation,
manufacture, storage, transportation, treatment, disposal, release or
threatened release of any hazardous waste or substance, as those terms
are defined in the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986,
Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable
state or Federal laws, rules, or regulations adopted pursuant to any
of the foregoing or intended to protect human health or the
environment ("Environmental Laws"). The terms "hazardous waste" and
"hazardous substance" shall also include, without limitation,
petroleum and petroleum by-products or any fraction thereof and
asbestos. The representations and warranties contained herein are
based on Grantor's due diligence in investigating the Collateral for
hazardous wastes and substances. Grantor hereby (a) releases and
waives any future claims against Lender for indemnity or contribution
in the event Grantor becomes liable for cleanup or other costs under
any Environmental Laws, and (b) agrees to indemnify and hold harmless
Lender against any and all claims and losses resulting from a breach
of this provision of this Agreement, or as a result of a violation of
any Environmental Laws. This obligation to indemnify shall survive the
payment of the Indebtedness and the satisfaction of this Agreement.
MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain
all risks insurance, including without limitation fire, theft and
liability coverage together with such other insurance as Lender may
require with respect to the Collateral, in form, amounts, coverages
and basis reasonably acceptable to Lender and issued by a company or
companies reasonably acceptable to Lender. Grantor, upon request of
Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished
without at least ten (10) days' prior written notice to Lender and not
including any disclaimer of the insurer's liability for failure to
give such a notice. Each insurance policy also shall include an
endorsement providing that coverage in favor of Lender will not be
impaired in any way by any act, omission or default of Grantor or any
other person. In connection with all policies covering assets in which
Lender holds or is offered a security interest, Grantor will provide
Lender with such loss payable or other endorsements as Lender may
<PAGE>
01-19-1999 COMMERCIAL SECURITY AGREEMENT PAGE 3
LOAN NO 5000009005 (CONTINUED)
require. If Grantor at any time fails to obtain or maintain any
insurance as required under this Agreement, Lender may (but shall not
be obligated to) obtain such insurance as Lender deems appropriate,
including if it so chooses "single interest insurance," which will
cover only Lender's interest in the Collateral.
APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify
Lender of any loss or damage to the Collateral. Lender may make proof
of loss if Grantor fails to do so within fifteen (15) days of the
casualty. All proceeds of any insurance on the Collateral, including
accrued proceeds thereon, shall be held by Lender as part of the
Collateral. If Lender consents to repair or replacement of the damaged
or destroyed Collateral, Lender shall, upon satisfactory proof of
expenditure, pay or reimburse Grantor from the proceeds for the
reasonable cost of repair or restoration. If Lender does not consent
to repair or replacement of the Collateral, Lender shall retain a
sufficient amount of the proceeds to pay all of the Indebtedness, and
shall pay the balance to Grantor. Any proceeds which have not been
disbursed within six (6) months after their receipt and which Grantor
has not committed to the repair or restoration of the Collateral shall
be used to prepay the Indebtedness.
INSURANCE RESERVES. Lender may require Grantor to maintain with Lender
reserves for payment of insurance premiums, which reserves shall be
created by monthly payments from Grantor of a sum estimated by Lender
to be sufficient to produce, at least fifteen (15) days before the
premium due date, amounts at least equal to the insurance premiums to
be paid. If fifteen (15) days before payment is due, the reserve funds
are insufficient, Grantor shall upon demand pay any deficiency to
Lender. The reserve funds shall be held by Lender as a general deposit
and shall constitute a non-interest-bearing account which Lender may
satisfy by payment of the insurance premiums required to be paid by
Grantor as they become due. Lender does not hold the reserve funds in
trust for Grantor, and Lender is not the agent of Grantor for payment
of the insurance premiums required to be paid by Grantor. The
responsibility for the payment of premiums shall remain Grantor's sole
responsibility.
INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to
Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following:
(a) the name of the insurer; (b) the risks insured; (c) the amount of
the policy; (d) the property insured; (e) the then current value on
the basis of which insurance has been obtained and the manner of
determining that value; and (f) the expiration date of the policy. In
addition, Grantor shall upon request by Lender (however not more often
than annually) have an independent appraiser satisfactory to Lender
determine, as applicable, the cash value or replacement cost of the
Collateral.
GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession of the
tangible personal property and beneficial use of all the Collateral and may use
it in any lawful manner not inconsistent with this Agreement or the Related
Documents, provided that Grantor's right to possession and beneficial use shall
not apply to any Collateral where possession of the Collateral by Lender is
required by law to perfect Lender's security interest in such Collateral. If
Lender at any time has possession of any Collateral, whether before or after an
Event of Default, Lender shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral if Lender takes such action for
that purpose as Grantor shall request or as Lender, in Lender's sole discretion,
shall deem appropriate under the circumstances, but failure to honor any request
by Grantor shall not of itself be deemed to be a failure to exercise reasonable
care. Lender shall not be required to take any steps necessary to preserve any
rights in the Collateral against prior parties, nor to protect, preserve or
maintain any security interest given to secure the Indebtedness.
EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without limitation
all taxes, liens, security interests, encumbrances, an other claims, at any time
levied or placed on the Collateral. Lender also may (but shall not be obligated
to) pay all costs for insuring, maintaining and preserving the Collateral. All
such expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses shall become a
part of the Indebtedness and, at Lender's option, will (a) be payable on demand,
(b) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (i) the term of any
applicable insurance policy or (ii) the remaining term of the Note, or (c) be
treated as a balloon payment which will be due and
<PAGE>
payable at the Note's maturity. This Agreement also will secure payment of these
amounts. Such right shall be in addition to all other rights and remedies to
which Lender may be entitled upon the occurrence of an Event of Default.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when
due on the Indebtedness.
OTHER DEFAULTS. Failure of Grantor to comply with or to perform any
other term, obligation, covenant or condition contained in this
Agreement or in any of the Related Documents or in any other agreement
between Lender and Grantor.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower's
property or Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Agreement or any of
the Related Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Grantor under this Agreement,
the Note or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any collateral documents to create a valid and perfected security
interest or lien) at any time and for any reason.
INSOLVENCY. The dissolution or termination of Grantor's existence as a
going business, the insolvency of Grantor, the appointment of a
receiver for any part of Grantor's property, any assignment for the
benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws
by or against Grantor.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against the Collateral or any other collateral
securing the Indebtedness. This includes a garnishment of any of
Grantor's deposit accounts with Lender. However, this Event of Default
shall not apply if there is a good faith dispute by Grantor as to the
validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Grantor gives Lender written
notice of the creditor or forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole discretion,
as being an adequate reserve or bond for the dispute.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or such Guarantor
dies or becomes incompetent. Lender, at its option, may, but shall not
be required to, permit the Guarantor's estate to assume
unconditionally, the obligations arising under the guaranty in a
manner satisfactory to Lender, and, in doing so, cure the Event of
Default.
ADVERSE CHANGE. A material adverse change occurs in Grantor's
financial condition, or Lender believes the prospect of payment or
performance of the Indebtedness is impaired.
RIGHT TO CURE. If any default, other than a Default on Indebtedness,
is curable and if Grantor has not been given a prior notice of a
breach of the same provision of this Agreement, it may be cured (and
no Event of Default will have occurred) if Grantor, after Lender sends
written notice demanding cure of such default, (a) cures the default
within fifteen (15) days; or (b), if the cure requires more than
fifteen (15) days, immediately initiates steps which Lender deems in
Lender's sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.
<PAGE>
01-19-1999 COMMERCIAL SECURITY AGREEMENT PAGE 4
LOAN NO 5000009005 (CONTINUED)
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Oregon Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:
ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to
pay, immediately due and payable, without notice.
ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender
all or any portion of the Collateral and any and all certificates of
title and other documents relating to the Collateral. Lender may
require Grantor to assemble the Collateral and make it available to
Lender at a place to be designated by Lender. Lender also shall have
full power to enter upon the property of Grantor to take possession of
and remove the Collateral. If the Collateral contains other goods not
covered by this Agreement at the time of repossession, Grantor agrees
Lender may take such other goods, provided that Lender makes
reasonable efforts to return them to Grantor after repossession.
SELL THE COLLATERAL. Lender shall have full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds thereof in
its own name or that of Grantor. Lender may sell the Collateral at
public auction or private sale. Unless the Collateral threatens to
decline speedily in value or is of a type customarily sold on a
recognized market, Lender will give Grantor reasonable notice of the
time after which any private sale or any other intended disposition of
the Collateral is to be made unless Grantor has signed, after an Event
of Default occurs, a statement renouncing or modifying Grantor's right
to notification of sale. The requirements of reasonable notice shall
be met if such notice is given at least ten (10) days before the time
of the sale or disposition. All expenses relating to the disposition
of the Collateral, including without limitation the expenses of
retaking, holding, insuring, preparing for sale and selling the
Collateral, shall become a part of the Indebtedness secured by this
Agreement and shall be payable on demand, with interest at the Note
rate from date of expenditure until repaid.
APPOINT RECEIVER. To the extent permitted by applicable law, Lender
shall have the following rights and remedies regarding the appointment
of a receiver: (a) Lender may have a receiver appointed as a matter of
right, (b) the receiver may be an employee of Lender and may serve
without bond, and (c) all fees of the receiver and his or her attorney
shall become part of the Indebtedness secured by this Agreement and
shall be payable on demand, with interest at the Note rate from date
of expenditure until repaid.
COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from
the Collateral. Lender may at any time in its discretion transfer any
Collateral into its own name or that of its nominee and receive the
payments, rents, income, and revenues therefrom and hold the same as
security for the Indebtedness or apply it to payment of the
Indebtedness in such order of preference as Lender may determine.
Insofar as the Collateral consists of accounts, general intangibles,
insurance policies, instruments, chattel paper, choses in action, or
similar property, Lender may demand, collect, receipt for, settle,
compromise, adjust, sue for, foreclose, or realize on the Collateral
as Lender may determine, whether or not Indebtedness or Collateral is
then due. For these purposes, Lender may, on behalf of and in the name
of Grantor, receive, open and dispose of mail addressed to Grantor;
change any address to which mail and payments are to be sent; and
endorse notes, checks, drafts, money orders, documents of title,
instruments and items pertaining to payment, shipment, or storage of
any Collateral. To facilitate collection, Lender may notify account
debtors and obligors on any Collateral to make payments directly to
Lender.
OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the
Collateral, Lender may obtain a judgment against Grantor for any
deficiency remaining on the Indebtedness due to Lender after
application of all amounts received from the exercise of the rights
provided in this Agreement. Grantor shall be liable for a deficiency
even if the transaction described in this subsection is a sale of
accounts or chattel paper.
OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and
remedies of a secured creditor under the provisions of the Uniform
Commercial Code, as may be amended from time to time. In addition,
Lender shall have and may exercise any or all other rights and
remedies it may have available at law, in equity, or otherwise.
<PAGE>
CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether
evidenced by this Agreement or the Related Documents or by any other
writing, shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Grantor
under this Agreement, after Grantor's failure to perform, shall not
affect Lender's right to declare a default and to exercise its
remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire and final understanding and agreement of the
parties as to the matters set forth in this Agreement. No alteration
of or amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.
APPLICABLE LAW. This Agreement has been delivered to Lender and
accepted by Lender in the State of Oregon. If there is a lawsuit,
Grantor agrees upon Lender's request to submit to the jurisdiction of
the courts of Multnomah County, the State of Oregon. Lender and
Grantor hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Grantor
against the other. This Agreement shall be governed by and construed
in accordance with the laws of the State of Oregon.
ATTORNEYS' FEES; EXPENSES. Grantor agrees to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lender's
legal expenses, incurred in connection with the enforcement of this
Agreement. Lender may pay someone else to help enforce this Agreement,
and Grantor shall pay the costs and expenses of such enforcement.
Costs and expenses include Lender's attorneys' fees and legal expenses
whether or not there is a lawsuit, including attorneys' fees and legal
expenses for bankruptcy proceedings (and including efforts to modify
or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services. Grantor also shall pay
all court costs and such additional fees as may be directed by the
court.
CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Grantor
under this Agreement shall be joint and several, and all references to
Grantor shall mean each and every Grantor. This means that each of the
persons signing below is responsible for ALL obligations in this
Agreement.
NOTICES. All notices required to be given under this Agreement shall
be given in writing, may be sent by telefacsimile (unless otherwise
required by law), and shall be effective when actually delivered or
when deposited with a nationally recognized overnight courier or
deposited in the United States mail, first class, postage prepaid,
addressed to the party to whom the notice is to be given at the
address shown above. Any party may change its address for notices
under this Agreement by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the
party's address. To the extent permitted by applicable law, if there
is more than one Grantor, notice to any Grantor will constitute notice
to all Grantors. For notice purposes, Grantor will keep Lender
informed at all times of Grantor's current address(es).
POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and
lawful attorney-in-fact, irrevocably, with full power of substitution
to do the following: (a) to demand, collect, receive, receipt for, sue
and recover all sums of money or other property which may now or
hereafter become due, owing or payable from the Collateral; (b) to
execute, sign and endorse any and all claims, instruments, receipts,
checks, drafts or warrants issued in payment for the Collateral; (c)
to settle or compromise any and all claims arising under the
Collateral, and, in the place and stead of Grantor, to execute and
deliver its release and settlement for the claim; and (d) to file any
claim or claims or to take any action or institute or take
<PAGE>
01-19-1999 COMMERCIAL SECURITY AGREEMENT PAGE 5
LOAN NO 5000009005 (CONTINUED)
part in any proceedings, either in its own name or in the name of
Grantor, or otherwise, which in the discretion of Lender may seem to
be necessary or advisable. This power is given as security for the
Indebtedness, and the authority hereby conferred is and shall be
irrevocable and shall remain in full force and effect until renounced
by Lender.
PREFERENCE PAYMENTS. Any monies Lender pays because of an asserted
preference claim in Borrower's bankruptcy will become a part of the
Indebtedness and, at Lender's option, shall be payable by Borrower as
provided above in the "EXPENDITURES BY LENDER" paragraph.
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified to be
within the limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be stricken and
all other provisions of this Agreement in all other respects shall
remain valid and enforceable.
SUCCESSOR INTERESTS. Subject to the limitations set forth above on
transfer of the Collateral, this Agreement shall be binding upon and
inure to the benefit of the parties, their successors and assigns.
WAIVER. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any
right shall operate as a waiver of such right or any other right. A
waiver by Lender of a provision of this Agreement shall not prejudice
or constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this
Agreement. No prior waiver by Lender, nor any course of dealing
between Lender and Grantor, shall constitute a waiver of any of
Lender's rights or of any of Grantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance
shall not constitute continuing consent to subsequent instances where
such consent is required and in all cases such consent may be granted
or withheld in the sole discretion of Lender.
WAIVER OF CO-OBLIGOR'S RIGHTS. If more than one person is obligated
for the Indebtedness, Borrower irrevocably waives, disclaims and
relinquishs all claims against such other person which Borrower has or
would otherwise have by virtue of payment of the Indebtedness or any
part thereof, specifically including but not limited to all rights of
indemnity, contribution or exoneration.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JANUARY 19,
1999.
GRANTOR:
R-B RUBBER PRODUCTS, INC.
BY:/s/Signature Illegible
RONALD L. BOGH, PRESIDENT
<PAGE>
AGREEMENT TO PROVIDE INSURANCE
<TABLE>
<CAPTION>
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$450,000.00 01-19-1999 01-20-2004 5000009005 402 305 E121729 TLH12
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<S> <C>
BORROWER: R-B RUBBER PRODUCTS, INC. LENDER: KEYBANK NATIONAL ASSOCIATION
904 E. 10TH AVENUE WILLAMETTE VALLEY COMMERCIAL BANKING CENTER,
MCMINNVILLE, OR 97128 SALEM
416 STATE STREET
P.O. BOX 2246 OR-20-96-0158
SALEM, OR 97308
</TABLE>
*20000012172950000090050l10*
INSURANCE REQUIREMENTS. R-B RUBBER PRODUCTS, INC. ("Grantor") understands that
insurance coverage is required in connection with the extending of a loan or the
providing of other financial accommodations to Grantor by Lender. These
requirements are set forth in the security documents. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"):
COLLATERAL: ALL EQUIPMENT, INCLUDING THE ATTACHED APPRAISALS LISTING SPECIFIC
EQUIPMENT.
TYPE. All risks, including fire, theft and liability.
AMOUNT. Full insurable value.
BASIS. Replacement value.
ENDORSEMENTS. Lender's loss payable clause with stipulation that
coverage will not be cancelled or diminished without a minimum of
ten (10) days' prior written notice to Lender.
DEDUCTIBLES. $500.00.
INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender.
INSURANCE MAILING ADDRESS. All documents and other materials relating to
insurance for this loan should be mailed, delivered or directed to the following
address:
KEYBANK NATIONAL ASSOCIATION
COMMERCIAL LOAN SERVICES
P.O. BOX 5278
BOISE, ID 83705-5278
(800) 539-2191
PROVISION OF INSURANCE. Grantor agrees to deliver to Lender, thirty (30) days
from the date of this Agreement, evidence of the required insurance as provided
above, with an effective date of January 19, 1999, or earlier.
WARNING
Unless Grantor provides Lender with evidence of the insurance coverage
as required by Grantor's security documents, Lender may purchase
insurance at Grantor's expense to protect Lender's interest. This
insurance may, but need not, also protect Grantor's interest. If the
collateral becomes damaged, the coverage Lender purchases may not pay
any claim Grantor makes or any claim made against Grantor. Grantor may
later cancel this coverage by providing evidence that Grantor has
obtained property coverage elsewhere. Grantor will be responsible for
the cost of any insurance purchased by Lender. The cost of this
insurance may be added to Grantor's Indebtedness. If the cost is added
to Grantor's Indebtedness, the interest rate on the underlying
Indebtedness will apply to this added amount. The effective date of
coverage may be the date Grantor's prior coverage lapsed or the date
Grantor failed to provide proof of coverage. The coverage Lender
purchases may be considerably more expensive than insurance Grantor
can obtain on Grantor's own and may not satisfy any need for property
damage coverage or any mandatory liability insurance requirements
imposed by applicable law.
In addition, the insurance may not provide any public liability or property
damage indemnification and may not meet the requirements of any financial
responsibility laws.
AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide to any person (including any insurance agent or
company) all information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial
<PAGE>
accommodations, or both.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JANUARY 19, 1999.
GRANTOR:
R-B RUBBER PRODUCTS, INC.
BY: /s/ Signature Illegible
RONALD L. BOGH, PRESIDENT
<PAGE>
01-19-1999 AGREEMENT TO PROVIDE INSURANCE PAGE 2
LOAN NO 5000009005 (CONTINUED)
FOR LENDER USE ONLY
INSURANCE VERIFICATION
DATE: _______________________ PHONE: ________________________
AGENT'S NAME: __________________________________________________
INSURANCE COMPANY:__________________________________________________________
POLICY NUMBER:______________________________________________________________
EFFECTIVE DATES: ___________________________________________________________
COMMENTS: __________________________________________________________________
<PAGE>
CORPORATE RESOLUTION TO BORROW
<TABLE>
<CAPTION>
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$450,000.00 01-19-1999 01-20-2004 5000009005 402 305 E121729 TLH12
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<S> <C>
BORROWER: R-B RUBBER PRODUCTS, INC. LENDER: KEYBANK NATIONAL ASSOCIATION
904 E. 10TH AVENUE WILLAMETTE VALLEY COMMERCIAL BANKING CENTER,
MCMINNVILLE, OR 97128 SALEM
416 STATE STREET
P.O. BOX 2246 OR-20-96-0158
SALEM, OR 97308
</TABLE>
*20000012172950000090050C10*
I, THE UNDERSIGNED SECRETARY OR ASSISTANT SECRETARY OF R-B RUBBER PRODUCTS, INC.
(THE "CORPORATION"), HEREBY CERTIFY THAT the Corporation is organized and
existing under and by virtue of the laws of the State of Oregon as a corporation
for profit, with its principal office at 904 E. 10TH AVENUE, MCMINNVILLE, OR
97128, and is duly authorized to transact business in the State of Oregon.
I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly
called and held ON JANUARY 19, 1999, at which a quorum was present and voting,
or by other duly authorized corporate action in lieu of a meeting, the following
resolutions were adopted:
BE IT RESOLVED, that ANY ONE (1) of the following named officers, employees, or
agents of this Corporation, whose actual signatures are shown below:
NAMES POSITIONS ACTUAL SIGNATURES
- ----- --------- -----------------
RONALD L. BOGH PRESIDENT X/s/ Signature Illegible
PAUL M. GILSON COO X/s/ Signature Illegible
acting for and on behalf of the Corporation and as its act and deed be, and they
hereby are, authorized and empowered:
BORROW MONEY. To borrow from time to time from KEYBANK NATIONAL
ASSOCIATION ("Lender") such sum or sums of money as in their judgment
should be borrowed, without limitation and to enter into other
agreements with Lender or its affiliates, including without limitation
agreements relating to interest rate swaps, or options, foreign
currency exchange, letters of credit, trust, investment or fiduciary
services, or other financial products or services, on such terms as
may be agreed upon between the Corporation and Lender or its
affiliates.
EXECUTE NOTES. To execute and deliver to Lender the promissory note or
notes, or other evidence of credit accomodations of the Corporation,
on Lender's forms, at such rates of interest and on such terms as may
be agreed upon, evidencing the sums of money so borrowed or any
indebtedness of the Corporation to Lender, and also to execute and
deliver to Lender one or more renewals, extensions, modifications,
refinancings, consolidations, or substitutions for one or more of the
notes, any portion of the notes, or any other evidence of credit
accomodations.
GRANT SECURITY. To mortgage, pledge, transfer, endorse, hypothecate,
or otherwise encumber and deliver to Lender, as security for the
payment of any loans or credit accomodations so obtained, any
promissory notes so executed (including any amendments to or
modifications, renewals, and extensions of such promissory notes), or
any other or further indebtedness of the Corporation to Lender at any
time owing, however the same may be evidenced, any property now or
hereafter belonging to the Corporation or in which the Corporation now
or hereafter may have an interest, including without limitation all
real property and all personal property (tangible or intangible) of
the Corporation. Such property may be mortgaged, pledged, transferred,
endorsed, hypothecated, or encumbered at the time such loans are
obtained or such indebtedness is incurred, or at any other time or
times, and may be either in addition to or in lieu of any property
theretofore mortgaged, pledged, transferred, endorsed, hypothecated,
or encumbered.
EXECUTE SECURITY DOCUMENTS. To execute and deliver to Lender the forms
of mortgage, deed of trust, pledge agreement, hypothecation agreement,
and other security
<PAGE>
agreements and financing statements which may be submitted by Lender,
and which shall evidence the terms and conditions under and pursuant
to which such liens and encumbrances, or any of them, are given; and
also to execute and deliver to Lender any other written instruments,
any chattel paper, or any other collateral, of any kind or nature,
which they may in their discretion deem reasonably necessary or proper
in connection with or pertaining to the giving of the liens and
encumbrances.
NEGOTIATE ITEMS. To draw, endorse, and discount with Lender all
drafts, trade acceptances, promissory notes, or other evidences of
indebtedness payable to or belonging to the Corporation in which the
Corporation may have an interest, and either to receive cash for the
same or to cause such proceeds to be credited to the account of the
Corporation with Lender, or to cause such other disposition of the
proceeds derived therefrom as they may deem advisable.
FURTHER ACTS. In the case of lines of credit, to designate additional
or alternate individuals as being authorized to request advances
thereunder, and in all cases, to do and perform such other acts and
things, to pay any and all fees and costs, and to execute and deliver
such other documents and agreements, INCLUDING AGREEMENTS WAIVING THE
RIGHT TO A TRIAL BY JURY, as they may in their discretion deem
reasonably necessary or proper in order to carry into effect the
provisions of these Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
Resolutions and performed prior to the passage of these Resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Lender may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.
BE IT FURTHER RESOLVED, that the Corporation will notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may designate
from time to time) prior to any (a) change in the name of the Corporation, (b)
change in the assumed business name(s) of the Corporation, (c) change in the
management of the Corporation,, (d) change in the authorized signer(s), (e)
conversion of the Corporation to a new or different type of business entity, or
(f) change in any other aspect of the Corporation that directly or indirectly
relates to any agreements between the Corporation and Lender. No change in the
name of the Corporation will take effect until after Lender has been notified.
I FURTHER CERTIFY that the officers, employees, and agents named above are duly
elected, appointed, or employed by or for the Corporation, as
<PAGE>
01-19-1999 CORPORATE RESOLUTION TO BORROW PAGE 2
LOAN NO 5000009005 (CONTINUED)
the case may be, and occupy the positions set opposite their respective names;
that the foregoing Resolutions now stand of record on the books of the
Corporation; and that the Resolutions are in full force and effect and have not
been modified or revoked in any manner whatsoever. The Corporation has no
corporate seal, and therefore, no seal is affixed to this certificate.
IN TESTIMONY WHEREOF, I HAVE HEREUNTO SET MY HAND ON JANUARY 19, 1999 AND ATTEST
THAT THE SIGNATURES SET OPPOSITE THE NAMES LISTED ABOVE ARE THEIR GENUINE
SIGNATURES.
CERTIFIED TO AND ATTESTED BY:
X /s/ Signature Illegible
X /s/ Signature Illegible
NOTE: In case the Secretary or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, It is advisable to have
this certificate signed by a second Officer or Director of the Corporation.
<PAGE>
UCC-1
STATE OF OREGON
Corporation Division - UCC
255 Capitol Street NE, Suite 151
Salem, OR 97310-1327
(503) 986-2200 Facsimile (503) 373-1166
STATE FINANCING STATEMENT STANDARD FORM
PLEASE TYPE OR PRINT LEGIBLY. READ INSTRUCTIONS BEFORE FILLING OUT FORM.
This Financing Statement is presented to filing officer pursuant to the Uniform
Commercial Code. This financing statement remains effective for a period of five
years from the date of filing, unless extended for additional periods as
provided for by ORS Chapter 79. A carbon, photographic or other reproduction of
this form, financing statement or security agreement may be filed as a financing
statement under ORS Chapter 79.
A. DEBTOR NAME(S) (if individual list last name first)
1. R-B RUBBER PRODUCTS, INC.
-------------------------
2. -----------------------------------------------------------------------
3. -----------------------------------------------------------------------
DEBTOR MAILING ADDRESS:
904 E. 10TH AVENUE
MCMINNVILLE, OR 97128
B. SECURED PARTY(IES) NAME AND ADDRESS
KEYBANK NATIONAL ASSOCIATION
416 STATE STREET
P.O. BOX 2246 OR-20-96-0158
SALEM, OR 97308
Contact Name: _____________________ Phone No.: ___________________________
C. ASSIGNEE(S) NAME AND ADDRESS (if any)
Contact Name: _____________________ Phone No.: ___________________________
D. DEBTOR SIGNATURE(S) REQUIRED:
BY: _________________________ BY: _________________________
BY: _________________________ BY: _________________________
E. DEBTOR SIGNATURE(S) NOT REQUIRED. If applicable, check the appropriate box
below to file without debtor signature(s). This statement is filed without
the debtor signature(s) to perfect a security interest in collateral.
SECURED PARTY MUST SIGN, when Debtor signature(s) is not required. See
instructions for further information.
/ / Collateral already subject to a security interest in another
jurisdiction.
/ / Which is proceeds of the described original collateral which was
perfected.
/ / Collateral as to which the filing has lapsed.
/ / Collateral acquired after a change of name, identity or corporate
structure of debtor.
By: _________________________ By: _________________________
Secured Party signature Secured Party signature
F. DESCRIBE THE COLLATERAL (ORS 79.4020).
/ / PRODUCTS of collateral are also covered.
<PAGE>
All Equipment; whether any of the foregoing is owned now or acquired later; all
accessions, additions, replacements, and substitutions relating to any of the
foregoing; all records of any kind relating to any of the foregoing; all
proceeds relating to any of the foregoing (including insurance, general
intangibles and accounts proceeds), together with the following specifically
described property: THE ATTACHED APPRAISALS LISTING SPECIFIC EQUIPMENT
RETURN ACKNOWLEDGMENT LETTER TO: (Include name, address, and identifier for the
debtor listed above. Limit the identifier to eight characters. REFER TO
INSTRUCTION, NUMBER 5.) Please do not type or print outside of bracketed area.
FEES
KEYBANK NATIONAL ASSOCIATION Make check for $10.00 payable
COMMERCIAL LOAN SERVICES to "Corporation Division."
P.O. BOX 5278
BOISE, ID 83705-5278 NOTE: Filing fees may be paid with VISA or
MasterCard. The card number and expiration
date should be submitted on a separate sheet
of paper for your protection.
DO NOT SUBMIT DUPLICATES OF THIS FILING
AND/OR ATTACHMENTS.
<PAGE>
INSTRUCTIONS
1. PLEASE TYPE THIS FORM USING BLACK RIBBON OR PRINT LEGIBLY. Must be legible
(type size, clarity, etc.) to be accepted for filing.
2. IF THE SPACE PROVIDED FOR ANY ITEM(S) ON THE FORM IS INADEQUATE, submit
additional information on 8 1/2" X 11" sheets. DO NOT STAPLE, TAPE OR GLUE
ANYTHING TO THIS FORM.
3. DEBTOR(S) NAMES: If the debtor is an individual, list as instructed. If the
debtor is a business, begin with the first word or character not an article
or punctuation mark.
4. SIGNATURES: Be sure that the financing statement has been properly signed.
A financing statement requires the signature of the debtor(s) except under
the following circumstances. If any of the circumstances apply, check the
appropriate box. Under the provisions of ORS 79.4020 a financing statement
is sufficient when it is signed by the secured party instead of the debtor
when it is filed to perfect a security interest in:
(A) Collateral already subject to a security interest in another
jurisdiction when it is brought into this state, or when the debtor's
location is changed to this state. Such a financing statement must state
that the collateral was brought into this state or that the debtor's
location was changed to this state under such circumstances; or
(B) Proceeds under ORS 79.3060 if the security interest in the original
collateral was perfected. Such a financing statement must describe the
original collateral; or
(C) Collateral as to which the filing has lapsed; or
(D) Collateral acquired after a change of name, identity or corporate
structure of the debtor.
5. AN ACKNOWLEDGMENT of your filed document will be mailed to the party
indicated in the "Return acknowledgment letter to" section. When submitting
multiple filings for the same debtor with the same secured party you may
wish to include an alpha/numeric identifier in the "Return acknowledgment
letter to" section of the document to help you identify which filing is
being acknowledged. This identifier will appear in the address of the
acknowledgment notice. Please limit the identifier to eight characters.
6. FILING FEES:
UCC-1 ..................................................$10.00 per filing
Make check payable to "Corporation Division."
NOTE: Filing fees may be paid with VISA or MasterCard. The card number and
expiration date should be submitted on a separate sheet of paper for your
protection.
7. Do not submit duplicates of this filing and/or attachments.
<PAGE>
DISBURSEMENT REQUEST AND AUTHORIZATION
<TABLE>
<CAPTION>
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$450,000.00 01-19-1999 01-20-2004 5000009005 402 305 E121729 TLH12
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<S> <C>
BORROWER: R-B RUBBER PRODUCTS, INC. LENDER: KEYBANK NATIONAL ASSOCIATION
904 E. 10TH AVENUE WILLAMETTE VALLEY COMMERCIAL BANKING CENTER,
MCMINNVILLE, OR 97128 SALEM
416 STATE STREET
P.O. BOX 2246 OR-20-96-0158
SALEM, OR 97308
</TABLE>
*20000012172950000090050l20*
LOAN TYPE. This is a Variable Rate (at Prime Rate announced by Lender, making an
initial rate of 7.750%), Installment Loan to a Corporation for $450,000.00 due
on January 20, 2004.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:
/ / PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR PERSONAL INVESTMENT.
X BUSINESS (INCLUDING REAL ESTATE INVESTMENT).
SPECIFIC PURPOSE. The specific purpose of this loan is: PURCHASE EQUIPMENT.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $450,000.00 as follows:
AMOUNT PAID TO BORROWER DIRECTLY: $450,000.00
$450,000.00 Deposited to Account #370131000652 -------------------
NOTE PRINCIPAL: $450,000.00
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:
PREPAID FINANCE CHARGES PAID IN CASH: $1,000.00
$1,000.00 Loan Fees
OTHER CHARGES PAID IN CASH: $25.00
$25.00 UCC Filing/Search Fees
-------------------
TOTAL CHARGES PAID IN CASH: $1,025.00
AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender automatically to deduct
from Borrower's account numbered 370131000652 the amount of any loan payment. If
the funds in the account are insufficient to cover any payment, Lender shall not
be obligated to advance funds to cover the payment. At any time and for any
reason, Borrower or Lender may voluntarily terminate Automatic Payments.
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION
AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED JANUARY 19, 1999.
BORROWER:
R-B RUBBER PRODUCTS, INC.
BY:/s/ Signature Illegible
RONALD L. BOGH, PRESIDENT
<PAGE>
<TABLE>
<CAPTION>
Code 1:LOCATION APPRAISAL
Code 2:TYPE WASTE RECOVERY, INC. Date: 06/08/98
Line C1 C2 Qty Description ORD
<S> <C> <C> <C> <C> <C>
99 PO MP LOT TIRE SHREDDER SYSTEM, INCLUDES BELT CONVEYOR FEEDS, GEAR REDUCTION BOX, 110,000.00
FRONT TIRE SHREDDER, DISK SCREENS, CONVEYOR OUTFEEDS, ELECTRICAL POWER
SYSTEM, ALL RELATED MOTORS, DRIVES, ETC., ALSO INCLUDES SPARE ROTORS
AND CUTTER KNIVES, PRINCIPAL INDICATES LATE 80'S VINTAGE
100 PO MP 1 BELT CONVEYOR, APPROX. 36" X 30" TIRE INFEED, *W/TIRE SHREDDER SYSTEM "
101 PO MP 1 BELT CONVEYOR, APPROX. 48" X 40", ELEVATED, WITH DRIVE, *W/TIRE SHREDDER SYSTEM "
102 PO MP 1 TIRE SHREDDER, CUSTOM, INCLUDES TWIN APPROX. 46" X 36" ROTORS, APPROX. (275)
TOTAL KNIVES, FEED HOPPER, ALL RELATED PERIPHERAL EQUIPMENT AND ACCESSORIES, "
*W/TIRE SHREDDER SYSTEM
103 PO MP 1 GEAR REDUCTION BOX, HANSEN, WITH APPROX. 200 H.P. MOTOR, *W/TIRE SHREDDER SYSTEM "
104 PO MP 1 BELT CONVEYOR, APPROX. 36" X 15" WITH DRIVE, *W/TIRE SHREDDER SYSTEM "
105 PO MP 1 BELT CONVEYOR, APPROX. 32" X 50", ELEVATED, WITH DRIVE, *W/TIRE SHREDDER SYSTEM "
106 PO MP 1 DISK SCREEN, APPROX. 4W, WITH DRIVE MOTORS, HEAVY DUTY FRAME AND BOX, ALSO "
INCLUDES FEED HOPPER, *W/TIRE SHREDDER SYSTEM
107 PO MP 1 BELT CONVEYOR, APPROX. 32" X 60", ELEVATED, WITH DRIVE, *W/TIRE SHREDDER SYSTEM "
108 PO MP LOT ELECTRICAL POWER SYSTEM, INCLUDES SQUARE D2000 AMP SWITCH GEAR, RELATED TRANSFORMERS, "
SWITCHES, BREAKERS, POWER SOURCE, *W/TIRE SHREDDER SYSTEM
109 PO MP 1 TIRE SPLITTER, NO MFG. PLATE AVAILABLE 1,500.00
110 PO MP LOT PRIMARY GRANULATOR SYSTEM, CONSISTING OF INFEED BELT CONVEYORS, METAL DETECTOR, 100,000.00
GRANULATOR, MOTORS, VIBRATING PAN, MAGNETIC BELT CONVEYOR, OUTFEED CONVEYORS,
ELECTRICAL POWER SYSTEM, ALL RELATED PERIPHERAL EQUIPMENT AND ACCESSORIES, ALSO
INCLUDES SPARE CUTTER KNIFES, PRINCIPAL INDICATES LATE 80'S VINTAGE
112 PO MP 1 BELT CONVEYOR, APPROX. 46" X 60" IDLER TROUGH ROLL CONVEYOR, WITH DRIVE, "
*W/PRIMARY GRANULATOR SYSTEM
113 PO MP 1 METAL DETECTOR, PROBABLE TECTRON, APPROX. 36" OPENING, *W/PRIMARY GRANULATOR "
SYSTEM
114 PO MP 1 GRANULATOR, CUSTOM, APPROX. 54" OPENING, INCLUDES (2) KNIFE BLOCKS, RELATED "
PERIPHERAL EQUIPMENT AND ACCESSORIES, *W/PRIMARY GRANULATOR SYSTEM
115 PO MP 2 MOTORS, TECO, 400 H.P., *W/PRIMARY GRANULATOR SYSTEM "
116 PO MP 1 VIBRATING PAN, APPROX. 5" X 7", *W/PRIMARY GRANULATOR SYSTEM "
117 PO MP 1 MAGNETIC BELT CONVEYOR, APPROX. 4" X 6", MOTORIZED, *W/PRIMARY GRANULATOR SYSTEM "
Page 14
<PAGE>
Code 1:LOCATION APPRAISAL
Code 2:TYPE WASTE RECOVERY, INC. Date: 06/08/98
Line C1 C2 Qty Description ORD
<S> <C> <C> <C> <C> <C>
118 PO MP 1 BELT CONVEYOR, APPROX 30" X 100", ELEVATED IDIER TROUGH ROLL, WITH DRIVE, *WIPRIMARY "
GRANULATOR SYSTEM
119 PO MP 1 MAGNETIC BELT CONVEYOR, APPROX. 30" X 8', MOTORIZED, *W/PRIMARY GRANULATOR SYSTEM "
120 PO MP 1 BELT CONVEYOR, APPROX. 24" X 25', ELEVATED IDLER TROUGH ROLL, WITH DRIVE, *W/PRIMARY "
GRANULATOR SYSTEM
121 PO MP LDT ELECTRICAL POWER SYSTEM, INCLUDES SWITCHGEAR, ASSTD. TRANSFORMERS, SWITCHES, "
BREAKERS, ETC. *W/PRIMARY GRANULATOR SYSTEM
122 PO MP LOT WIRE GRANULATOR SYSTEM, CONSISTING OF BELT CONVEYORS, METAL DETECTOR, GRANULATOR, 125,000.00
MAGNETIC BELT CONVEYOR, VIBRATING PANS, ELECTRICAL POWER SYSTEM, ETC., INCLUDES
ALL RELATED PERIPHERAL EQUIPMENT AND ACCESSORIES, ALSO INCLUDES SPARE CUTTER
KNIVES, PRINCIPAL INDICATES NEW IN 1997
123 PO MP 1 BELT CONVEYOR, APPROX, 22" X 35', ELEVATED IDLER TROUGH ROLL, WITH DRIVE, "
*W/ WIRE GRANULATOR SYSTEM
124 PO MP 1 BELT CONVEYOR, APPROX, 24" X 40", ELEVATED IDLER TROUGH ROLL WITH DRIVE, "
*W/WIRE GRANULATOR SYSTEM
125 PO MP 1 METAL DETECTOR, PROBABLE TECTRON, APPROX. 28" OPENING, *W/WIRE GRANULATOR SYSTEM "
126 PO MP 1 GRANULATOR, APPROX, 54" OPENING, CUSTOM, INCLUDES (2) KNIFE BLOCKS, RELATED "
PERIPHERAL EQUIPMENT AND ACCESSORIES, *W/WIRE GRANULATOR SYSTEM
127 PO MP 1 MOTOR, PROBABLE TECO, 450 H.P., *W/WIRE GRANULATOR SYSTEM "
128 PO MP 1 MAGNETIC BELT CONVEYOR, APPROX, 6" X 8", MOTORIZED, *W/WIRE GRANULATOR SYSTEM "
129 PO MP 2 VIBRATING PANS, APPROX. 5" X 7", *W/WIRE GRANULATOR SYSTEM "
130 PO MP 1 BELT CONVEYOR, APPROX. 24" X 50", ELEVATED IDLER TROUGH ROLL, WITH DRIVE, "
*W/WIRE GRANULATOR SYSTEM
131 PO MP 1 BELT CONVEYOR, APPROX, 24" X 35" ELEVATED IDLER TROUGH ROLL, WITH DRIVE, "
*W/WIRE GRANULATOR SYSTEM
132 PO MP 1 BELT CONVEYOR, APPROX. 24" X 100" ELEVATED IDLER TROUGH ROLL, MOTORIZED, "
OUTFEED, *W/WIRE GRANULATOR SYSTEM
133 PO MP LOT ELECTRICAL POWER SYSTEM, SQUARE D, MODEL 6 CONTROL CENTER, TWIN SECTIONS, "
(9) TOTAL SWITCHES, 600 AMP HORIZONTAL/300 VERTICAL, WITH TRANSFORMERS, SWITCHES,
BREAKERS, ETC., *W/WIRE GRANULATOR SYSTEM
Page 15
<PAGE>
Code 1:LOCATION APPRAISAL
Code 2:TYPE WASTE RECOVERY, INC. Date: 06/08/98
Line C1 C2 Qty Description ORD
<S> <C> <C> <C> <C> <C>
Total MP = MAIN PLANT 336,500.00
93 PO OF LOT COMPUTER HARDWARE, INCLUDES NOTEBOOK COMPUTER, (2) AST MODEL 622 ADVANTAGE DESKTOP 2,500.00
COMPUTERS, (2) 486 COMPUTER SYSTEMS, (2) 386 COMPUTER SYSTEMS, HEWLETT PACKARD
DESKJET 600C PRINTER, HEWLETT PACKARD DESKJET 520 PRINTER, HEWLETT PACKARD LASERJET
5P PRINTER, EPSON ACTION LASER 1500 PRINTER, PANASONIC MODEL KX-P1624 PRINTER, ETC.
94 PO OF LOT OFFICE MACHINES & EQUIPMENT, INCLUDES (6) CALCULATORS, CANON MODEL NP3050 COPIER, 3,650.00
TELEPHONE SYSTEM SURVEILLANCE SYSTEM WITH CAMERA AND TOSHIBA TIMELAPSES RECORDER,
SYMPHONIC TV/VCR, REFRIGERATOR, MICROWAVE OVEN, (2) IBM TYPEWRITERS, (2) HEWLETT
PACKARD OFFICE JET FAX MACHINES, HAND HELD RADIOS, ETC., LOCATED THROUGHOUT
95 PO OF LOT OFFICE FURNITURE, CONSISTING OF BOOKCASE, CABINET, (23) ASSTD. CHAIRS, (14) ASSTD. 3,000.00
DESKS, (20) ASSTD. FILE CABINETS, (7) ASSTD. TABLES, ETC., LOCATED THROUGHOUT
BORTHWICK OFFICES
Total OF = OFFICES 13,900.00
4 PO SH 1 WELDER, MILLER, MILLERMATIC 250, S/N KF938195, BUILT-IN WIRE FEED 750.00
5 PO SH 1 WELDER, MILLER, MODEL SRH-303, S/N HJ117271, WITH MODEL S-325 WIRE FEED 700.00
7 PO SH 1 AIR COMPRESSOR, CHAMPION, HORIZONTAL TANK, SINGLE STAGE WITH KOHLER MODEL K241S 400.00
SINGLE CYLINDER GAS ENGINE
8 PO SH 1 DRILL PRESS, FOREMOST, MODEL MADPO75AMA, S/N 96237 125.00
9 PO SH 1 OXY/ACY TORCH OUTFIT, WITH HEAVY DUTY CART, GAUGES, TIPS, HOSE, TORCH 125.00
10 PO SH 1 CUTOFF SAW, APPEARS CUSTOM, APPROX, 12" BLADE, APPROX. 3 H.P. MOTOR, HEAVY DUTY FRAME 400.00
11 PO SH 1 HACK SAW, RACINE, LIGHT DUTY 125.00
Page 16
<PAGE>
Code 1:LOCATION APPRAISAL
Code 2:TYPE WASTE RECOVERY, INC. Date: 06/08/98
Line C1 C2 Qty Description ORD
<S> <C> <C> <C> <C> <C>
13 PO SH 1 TIRE SPLITTER, HEAVY DUTY FRAME, WITH PRECISION EQUIPMENT CYLINDER, 15 H.P. 1,000.00
HYDRAULIC UNIT
16 PO SH 1 PORTABLE GRINDER, INCLUDES APPROX, 12' X 10' AUGER SCREW CONVEYOR, DUMP 5,000.00
HOPPER, APPROX. 1 H.P. DRIVE MOTOR, FRAME MOUNTED, PORTABLE, ALSO INCLUDES
APPROX. 12" X 10" ELEVATED MOTORIZED BELT CONVEYOR
65 PO SH 1 WELDER, MILLER, MODEL SRH-404, S/N HM051803 500.00
66 PO SH 1 AIR COMPRESSOR, QUINCY, MODEL 350, S/N 416761, HORIZONTAL TANK, HEAVY DUTY 1,500.00
SINGLE STAGE, 10 H.P., WITH AIR RECEIVING TANK [C+]
68 PO SH 1 HOIST, 1 TON, WITH TROLLEY 450.00
71 PO SH 1 WELDER, MILLER, COMPO 600, S/N R370087, WITH MILLER MODEL S32S WIRE FEED, 1,200.00
LEADS, HEAVY DUTY, LOCATED AT FABRICATION BUILDING
72 PO SH 1 WELDER, MILLER, MILLERMATIC 200, S/N JE745169, LOCATED AT FABRICATION BUILDING 750.00
75 PO SH 1 AIR COMPRESSOR, INGERSOLL RAND, TYPE 30, MODEL 5X3X3-1/2, MODEL 253D5, 550.00
S/N 241295, 2-STAGE, HORIZONTAL TANK, 5 H.P.
76 PO SH 1 OXY/ACY TORCH OUTFIT, WITH CART, GAUGES, TIPS, HOSE, TORCH 100.00
77 PO SH 1 DRILL PRESS, BARNES, 20", BELT DRIVE, OLDER STYLE 125.00
78 PO SH LOT POWER AND HAND TOOLS, LOCATED THROUGHOUT FABRICATION BUILDING, CONSISTING OF 500.00
DOUBLE END GRINDERS, RIGHT ANGLE GRINDERS, DRILLS, SAWS, ETC., ESTIMATE ONLY
Page 17
<PAGE>
Code 1:LOCATION APPRAISAL
Code 2:TYPE WASTE RECOVERY, INC. Date: 06/08/98
Line C1 C2 Qty Description ORD
<S> <C> <C> <C> <C> <C>
91 PO SH LOT MAINTANANCE SHOP EQUIPMENT, CONSISTING OF BATTERY CHARGER, BLOWER, BOTTLE JACK, 3,500.00
CHAIN HOIST, DOLLY, DRUM PUMPS, FILTER PUMP, FLOOR JACK, FUEL TANK, HEATERS,
JACK STANDS, LADDERS, PIPE STANDS, LOCKER SECTIONS, PALLET RACKS, PARTS
CABINETS, PUMP, RACK SECTIONS, RETRACTABLE REELS, VISES, WHEELBARROWS,
WORKBENCHES, ASSTD. POWER AND HAND TOOLS, ETC., LOCATED THROUGHOUT, INCLUDES
THOSE ASSETS NOT PREVIOUSLY LISTED
199 PO SH 3 DOLLIES, ASSORTED, SOME INSPECTED $3,000
Total SH = SHOP 32,725.00
21 PO TR 1 VAN TRAILER, CO. #42, PINES, MFG. 2/85, S/N 1PND281S6FK016802, SINGLE AXLE, 27' 1,200.00
22 PO TR 1 VAN TRAILER, CO. #160, PINES, MFG. 1985, S/N APPEARS TO BE 1PND2340SNK124352, 1,200.00
SINGLE AXLE, 27' LIST SHOWS S/N ENDS WITH 24092
23 PO TR 1 VAN TRAILER, CO. #81, PINES, MFG. 11/84, S/N 1FND281S2FN016294, 27', SINGLE AXLE 1,200.00
24 PO TR 1 VAN TRAILER, CO. #12, TRAILMOBILE, MFG. 8/74, S/N L50372, SINGLE AXLE, 27', [D] 250.00
25 PO TR 1 VAN TRAILER, CO. #126, PINES, MFG. 6/87, S/N 1PND281S2HKA26815, SINGLE AXLE, 27' 1,200.00
26 PO TR 1 VAN TRAILER, CO. #105, PINES, MFG. 12/86, S/N 1PND281S2HKA24174, SINGLE AXLE, 27' 1,200.00
27 PO TR 1 VAN TRAILER, CO. #36, EVAN & MONAN, MFG. 8/81, S/N 1NNVX2714BM055138, SINGLE 500.00
AXLE, 27', [C]
28 PO TR 1 VAN TRAILER, CO. #50, PINES, MFG. 5/84, S/N 1PNB281S9EKC14537, SINGLE AXLE, 27' 1,200.00
29 PO TR 1 VAN TRAILER, CO. #68, PINES, MFG. 12/86, S/N 1PND281S4HKA24211, SINGLE AXLE, 27' 1,200.00
30 PO TR 1 VAN TRAILER, CO. #165, PINES, MFG. 12/86, S/N 1PND281S2HKA24143, SINGLE AXLE, 24' 1,200.00
31 PO TR 1 VAN TRAILER, CO. #64, PINES, MFG. 12/86, S/N 1PND281S9HKA24057, SINGLE AXLE, 27' 1,200.00
32 PO TR 1 VAN TRAILER, CO. #162, PINES, MFG. 12/86, S/N 1PND281S8NKA24082, SINGLE AXLE, 27' 1,200.00
33 PO TR 1 VAN TRAILER, CO. #121, PINES, MFG. 8/87, S/N 1PND281S1HKA26854, SINGLE AXLE, 27' 1,200.00
34 PO TR 1 VAN TRAILER, CO. #4, TRAILMOBILE, S/N D63611, 45', TANDEM AXLE, [C-], 1968 1,000.00
35 PO TR 1 VAN TRAILER, CO. #57, PINES, MFG. 12/86, S/N 1PND281SOHKA25962, SINGLE AXLE, 27' 1,200.00
36 PO TR 1 VAN TRAILER, CO. #41, PINES, MFG. 2/85, S/N ENDS IN 16841, SINGLE AXLE, 27', 250.00
CURRENTLY DAMAGED. [D]
Page 18
<PAGE>
Code 1:LOCATION APPRAISAL
Code 2:TYPE WASTE RECOVERY, INC. Date: 06/08/98
Line C1 C2 Qty Description ORD
<S> <C> <C> <C> <C> <C>
37 PO TR 1 VAN TRAILER, CO. #40, PINES, MFG. 1/85, S/N 1PND281SBFK016722, SINGLE AXLE, 27' 1,200.00
38 PO TR 1 VAN TRAILER, CO. #82, PINES, MFG. 11/84, S/N 1PND28132FKC16408, SINGLE AXLE, 27' 1,200.00
39 PO TR 1 VAN TRAILER, CO. #111, PINES, MFG. 11/84, S/N 1PND281D8FK816400, SINGLE AXLE, 27' 1,200.00
40 PO TR 1 VAN TRAILER, CO. #109, PINES, MFG. 11/84, S/N 1PND281SOFKO16326, SINGLE AXLE, 27' 1,200.00
41 PO TR 1 VAN TRAILER, CO. #166, PINES, MFG. 12/86, S/N 1PND281S4HKA24161, SINGLE AXLE, 27' 1,200.00
42 PO TR 1 VAN TRAILER, CO. #107, PINES, MFG. 11/84, S/N 1PND28138FK016431, SINGLE AXLE, 27' 1,200.00
43 PO TR 1 VAN TRAILER, CO. #52, PINES, MFG. 3/84, S/N 1PND281S01KO14175, SINGLE AXLE, 27' 1,200.00
44 PO TR 1 VAN TRAILER, CO. #154, PINES, MFG. 12/86, S/N 1PND281S3HKA24008, SINGLE AXLE, 27' 1,200.00
45 PO TR 1 VAN TRAILER, CO. #157, PINES, MFG. 12/86, S/N 1PND281S1HKA24019, SINGLE AXLE, 27' 1,200.00
46 PO TR 1 VAN TRAILER, CO. #143, TRAILMOBILE, MFG. 4/84, S/N 1PTO7VAE2E9005474, SINGLE AXLE, 27' 1,000.00
48 PO TR 1 VAN TRAILER, CO. #28, FRUEHAUF, MFG. 7/72, S/N BLP9900-01, SINGLE AXLE, 27',[D-], 250.00
DAMAGE NOTED ON FRONT BULK HEAD
49 PO TR 1 VAN TRAILER, CO. #139, HOBBS, MFG. 7/79, S/N BLV-6076-07, SINGLE AXLE, 27',[C-] 500.00
50 PO TR 1 VAN TRAILER, CO. #69, PINES, MFG. 12/86, S/N IPND281S7HKA24073, SINGLE AXLE, 27' 1,200.00
51 PO TR 1 VAN TRAILER, CO. #78, PINES, MFG. 11/84, S/N 1PND281S76L455, SINGLE AXLE, 27' 1,200.00
52 PO TR 1 VAN TRAILER, CO. #168, PINES, MFG. 12/86, S/N 1PND281SXNKA24231, SINGLE AXLE, 27' 1,200.00
53 PO TR 1 VAN TRAILER, CO. #58, PINES, MFG. 12/85, S/N 1PND281S6HKA24050, SINGLE AXLE, 27' 1,200.00
54 PO TR 1 VAN TRAILER, CO. #13, TRAILMOBILE, S/N L60338, MFG. 8/74, SINGLE AXLE, 27',[C-], 300.00
TOP DAMAGE NOTED
55 PO TR 1 VAN TRAILER, CO. #25, TRAILMOBILE, MFG. 6/72, S/N J62479, SINGLE AXLE, 27',[C-] 500.00
56 PO TR 1 VAN TRAILER, CO. #110, PINES, MFG. 11/84, S/N 1PND281SKFK016296, SINGLE AXLE, 27' 1,200.00
57 PO TR 1 VAN TRAILER, CO. #118, EVAN MONAN, MFG. 8/81, S/N 1NNVX2713AM055146, SINGLE AXLE, 500.00
27',[C-]
58 PO TR 1 VAN TRAILER, CO. #96, PINES, MFG. 12/86, S/N 1PND261S6HKA24193, SINGLE AXLE, 27' 1,200.00
59 PO TR 1 VAN TRAILER, CO. #86, PINES, MFG. 12/86, S/N 1PND261S5HKA24024, SINGLE AXLE, 27' 1,200.00
60 PO TR 1 VAN TRAILER, CO. #95, PINES, MFG. 12/86, S/N 1PND281S7HKA24140, SINGLE AXLE, 27' 1,200.00
Page 19
<PAGE>
Code 1:LOCATION APPRAISAL
Code 2:TYPE WASTE RECOVERY, INC. Date: 06/08/98
Line C1 C2 Qty Description ORD
<S> <C> <C> <C> <C> <C>
61 PO TR 1 VAN TRAILER, CO. #75, PINES, MFG. 11/84, S/N IPND281S3FKO16356, SINGLE AXLE, 27" 1,200.00
62 PO TR 1 VAN TRAILER, CO. #44, PINES, MFG. 4/84, S/N IPND281S1EKO14390, SINGLE AXLE, 27" 1,200.00
64 PO TR 1 VAN TRAILER, CO. #93, PINES, MFG. 12/86, S/N IPND281S2HKA24993, SINGLE AXLE, 27" 1,200.00
82 PO TR 1 WALKING FLOOR TRAILER, #202, OPEN TOP, FRUEHAUF, MODEL 12,000.00
FG6-F2-45-W3-96,S/N 1H2VD4526FHD78419, MFG. 9/85
83 PO TR 1 VAN TRAILER, #53 PINES, MFG. 12/86, S/N IPND281S4H4A24189, SINGLE AXLE, 27" 1,200.00
85 PO TR 1 VAN TRAILER, CO. #153, PINES, MFG. 12/86, S/N IPND281S6HKA24209, SINGLE AXLE, 27" 1,200.00
86 PO TR 1 VAN TRAILER, CO. #67, PINES, MFG. 12/86, S/N IPND23136HK23982, SINGLE AXLE, 27" 1,200.00
87 PO TR 1 VAN TRAILER, CO. #47, PINES, MFG. 12/86,S/NNOT AVAILABLE, SINGLE AXLE, 27", 1,200.00
LIST SHOWS S/N ENDS IN 4324
89 PO TR 1 WALKING FLOOR TRAILER, CO. #203, OPEN TOP, FRUEHAUF, S/N 1H2VO4522FH078417, MFG. 9/85 12,000.00
90 PO TR 1 WALKING FLOOR TRAILER, CO. #201, FRUEHAUF, 1986, S/N ENDS IN 8436, NOT PHYSICALLY 12,000.00
INSPECTED
196 PO TR 4 VAN TRAILERS, EARLY 70'S, ASSORTED, AVERAGE (NOT PHYSICALLY INSPECTED) #11, 15, 24, 30 2,000.00
197 PO TR 6 VAN TRAILERS, LATE 70'S, ASSORTED, AVERAGE (NOT PHYSICALLY INSPECTED) 6,000.00
#32, 35, 38, 77, 116, 117
198 PO TR 8 VAN TRAILERS, MID 80'S, PINES, 27" (NOT PHYSICALLY INSPECTED) 9,600
TOTAL TR = TRAILERS 175,550.00
1 PO VE 1 WHEEL LOADER, CASE, MODEL 721B, S/N JAK0023011, ENCLOSED CAB, 20.5-25 TIRES, 55,000.00
DIESEL ENGINE, APPROX. 2-1/2 CU.YD. FRONT LOADER BUCKET, TIRES FAIR-GOOD, [C]
2 PO VE 1 FLATBED TRUCK, FORD, MODEL F350, FX2, S/N NOT AVAILABLE, STANDARD TRANSMISSION, 3,500.00
35677 MILES, PROBABLY EARLY 90'S VINTAGE
6 PO VE 1 FORKLIFT, CLARK, MODEL GPS30MC, S/NGP138MC-0033-9110,4,450 I.B.CAPACITY, 166" 6,500.00
LIFT HEIGHT,TRIPLE MAST, CUSHION TIRES, LPG GAS
14 PO VE 1 TRUCK TRACTOR, KENWORTH, S/N NOT READABLE, CABOVER, SINGLE AXLE, PROBABLE EARLY 2,000.00
1980'S VINTAGE, LIST SHOWS S/N ENDS IN 3040
15 PO VE 1 WHEEL LOADER, CASE, MODEL 621,S/N ENDS IN 24270 23.5-25 TIRES,TIRES FAIR, 57,500.00
APPROX. 2-1/2 CU.YD.FRONT LOADER BUCKET, ENCLOSED CAB, DIESEL ENGINE, [C]
Page 20
<PAGE>
Code 1:LOCATION APPRAISAL
Code 2:TYPE WASTE RECOVERY, INC. Date: 06/08/98
Line C1 C2 Qty Description ORD
<S> <C> <C> <C> <C> <C>
17 PO VE 1 WHEEL LOADER, JOHN DEERE, MODEL 544C,S/N NOT AVAILABLE, NCLOSED CAB, DIESEL ENGINE, 20,000.00
17.5-25 TIRES, TIRES FAIR, APPROX. 1-1/2 CU. YD. FRONT LOADER HYDRAULIC
BUCKET/CLAMP ATTACHMENT. [C-]
19 PO VE 1 LIFT TRUCK, WHITE GMC, NO S/N AVAILABLE, TANDEM AXLE, APPROX. LATE 70'S-EARLY 80'S 5,500.00
VINTAGE, INCLUDES CALLAHAN HOIST/LIFT WITH 5TH WHEEL, S/N 86-DC-0156
20 PO VE 1 HYDRAULIC EXCAVATOR, JOHN DEERE, MODEL 690D-LC, S/N DW890DL520328, APPROX, 42,500.00
30" X 10" CRAWLERS, UNDERCARRIAGE FAIR, ENCLOSED CAB, APPROX. 10' STICK, WITH
GEITH EXCAVATOR BUCKET WITH HANDLING ATTACHMENT, [C]
189 PO VE 1 TRUCK TRACTOR, 1978, FORD, S/N ENDS WITH 6038 (NOT PHYSICALLY INSPECTED) 2,250.00
#609
190 PO VE 1 TRUCK TRACTOR, 1984, FORD, S/N ENDS WITH 4045 (NOT PHYSICALLY INSPECTED) 1,200.00
#77
192 PO VE 1 HOIST TRUCK, 1974 MACK, S/N ENDS WITH 5780 (NOT PHYSICALLY INSPECTED) #548 4,000.00
194 PO VE 1 TRUCK TRACTOR, 1954, GMC, S/N ENDS WITH 2954 (NOT PHYSICALLY INSPECTED) #841 600.00
195 PO VE 1 TRUCK TRACTOR, 1989, WHITE, S/N ENDS WITH 6231 (NOT PHYSICALLY INSPECTED) #58066 14,000.00
Total VE = VEHICLES 236,560.00
----------
Total PO = PORTLAND, OR 680,350
87 Volvo White at wet nut 17,206
Prop truck & 3 boxes (79 GMC) 15,000
Liquidation Value $712,550
</TABLE>
Page 21
<PAGE>
EXHIBIT 10.2
LEASE OF REAL PROPERTY
THIS LEASE OF REAL PROPERTY is made and entered into effective the 1st
day of February, 1999, by and between EEEK Limited Partnership (the "Lessor")
and RB RECYCLING, Inc., an Oregon corporation ("Lessee"), acting through its
duly authorized officer.
W I T N E S S E T H:
For and in consideration of the sum of Ten Dollars ($10.00) and other
good and valuable considerations, the receipt and sufficiency of which are
hereby acknowledged and confessed, the parties hereto agree as follows:
1. PREMISES. The premises leased to Lessee, together with
appurtenances, are herein referred to as the "demised premises" and are situated
in the City of Portland, County of Multnomah, State of Oregon, the legal
description thereof being as follows:
Lots 1 through 10, Block 5, SWINTON, Portland, Multnomah County,
Oregon.
2. TERM. The primary term of this Lease shall be for five (5) years,
commencing on the 1st day of February, 1999, and ending on the 31st day of
January, 2004, subject to one successive five (5) year renewal term (the
"Renewal Term") thereafter, at Lessee's option, as provided for herein.
3. RENT.
(a) PRIMARY TERM. Lessee agrees to pay the Lessor during the primary
term of this Lease, as rent for the use and occupancy of the demised
premises, the following:
(i) During the first year of the primary term of this
lease monthly rent shall be the sum of $950 per
month.
(ii) During the second year of the primary term of this
lease monthly rent shall be the sum of $1,025 per
month.
(iii) During the third year of the primary term of this
lease monthly rent shall be the sum of $1,100 per
month.
(iv) During the fourth year of the primary term of this
lease monthly rent shall be the sum of $1,175 per
month.
(v) During the fifth year of the primary term of this
lease monthly rent shall be the sum of $1,250 per
month.
<PAGE>
Rent shall be payable monthly in advance, on the first day of
each calendar month throughout the primary term of this Lease, and
during the Renewal Term. All rent shall be paid in lawful money of the
United States and without prior notice or demand.
(a) RENEWAL TERM. Lessee agrees to pay the Lessor
during the Upon election of the Lessee to exercise its option to renew
this Lease for the Renewal Term, as set forth in Paragraph 31 below,
the monthly rent for each month during the Renewal Term shall be as
follows:
(i) During the first year of the Renewal Term of this
lease monthly rent shall be the sum of $1,325 per
month.
(ii)During the second year of the Renewal Term of
this lease monthly rent shall be the sum of
$1,400 per month.
(iii) During the third year of the Renewal Term of
this lease monthly rent shall be the sum of
$1,475 per month.
(iv)During the fourth year of the Renewal Term of
this lease monthly rent shall be the sum of
$1,550 per month.
(v) During the fifth year of the Renewal Term of this
lease monthly rent shall be the sum of $1,625 per
month.
4. LESSEE'S ACCEPTANCE OF LEASE. Lessee accepts said letting and agrees
to pay to the order of the Lessor the rentals above stated for the primary term
of this Lease and for the Renewal Term, in advance, at the times and in the
manner aforesaid.
5. TAXES.
(a) In addition to the rentals above provided, Lessee shall
during any Lease term, pay and discharge, or cause to be paid
and discharged, prior to the delinquency date thereof, all
real and personal property taxes levied by any public agency
authorized to levy such taxes, including all existing and
future assessments against the property which are made for the
purpose of paying for improvements, such as, without
limitation, street improvements, street sewers and water pipes
and any increase in property taxes arising out of or related
to any capital improvements constructed on the demised
premises by Lessee.
(b) General taxes on the demised premises for the first year
of the primary term of this Lease and for the last year of the
primary term of this Lease (or, if exercised by Lessee, the
Renewal Term of this Lease) shall be prorated between Lessor
and Lessee through the last day of the term of this Lease.
(c) If Lessee shall, in good faith, contest such tax on the
demised premises, then Lessee may, at its expense, defend
itself and Lessor against the same and shall pay and satisfy
any judgment, including all penalties and interest that may be
rendered thereon; provided, however,
<PAGE>
Lessor may require Lessee to furnish to Lessor a surety bond
or other security satisfactory to Lessor in an amount equal to
such contested tax, indemnifying Lessor against liability for
such tax and holding the demised premises free from the effect
of such tax.
6. INSURANCE.
(A) LIABILITY INSURANCE. Lessee shall, at all times during any
term of this Lease, carry and maintain a policy of broad form
comprehensive public liability insurance policies with an insurer
licensed to do business in the State of Oregon, by the terms of
which Lessee is named as an insured, and Lessor is named as an
additional insured. Such insurance policy or policies shall be
maintained in the minimum coverage amounts of Five Hundred
Thousand Dollars ($500,000.00) for bodily injury to, or death of,
one person, and One Million Dollars ($1,000,000.00) for bodily
injury or death in any one occurrence. Such insurance shall be
stated to be primary and non-contributing with any other
insurance available for the protection of Lessor, and shall
contain a provision that Lessor, although named as an insured,
shall nevertheless be entitled to recover under said policy for
any loss, injury or damages to Lessor, his agents and employees,
or to the property of said persons, by result of the negligence
of Lessee.
(B) CERTIFICATES OF INSURANCE. All policies of insurance
procured and maintained by Lessee hereunder shall be issued in
the name of Lessee, and indicate Lessor as an additional
insured party. Executed copies of such policy or policies of
insurance, or certificates thereof, shall be delivered to
Lessor, and all such policies shall contain a provision that
not less than thirty (30) days' written notice shall be given
to Lessor prior to the cancellation, reduction of coverage, or
any material change in such policy.
7. UTILITIES. Lessee shall pay all charges for water, sewage, gas,
electricity, telephone, trash collection, and other like services used by Lessee
or any licensee, agent or other person occupying or using the demised premises.
8. PAYMENTS AND NOTICES. All rents and other sums payable by Lessee to
Lessor hereunder shall be paid to Lessor at the address herein, or at such other
place as Lessor may hereafter designate in writing and deliver to Lessee. Any
notice to be given by either of the parties hereto to the other hereunder may be
delivered in person to Lessor or to Lessee or may be deposited in the United
States mail, duly registered or certified, with postage prepaid, and addressed
to the party for whom intended, as follows:
If to Lessee: If to Lessor:
RB Recycling, Inc. EEEK Limited Partnership
8501 North Borthwick 7620 N.E. Killingsworth
Portland, Oregon 97217 Portland, Oregon 97218
Attn: Plant Manager Attn: Wayne J. Easley,
Managing General Partner
<PAGE>
With a Copy to:
RB Rubber, Inc.
904 E. 10th Avenue
McMinnville, Oregon 97128
Attn: Paul Gilson
or at such other address as either of the parties hereto may thereafter
designate in writing. Service of any such written notice shall be deemed
complete at the time of such personal delivery or upon five days after the
mailing thereof as hereinabove provided.
9. ENTIRE AGREEMENT. This Lease contains the entire agreement of the
parties hereto with respect to the matters covered hereby, and no other
agreement, statement, or promise made by any party hereto, or to any employee,
officer, or agent of any party hereto, which is not contained herein, shall be
binding or valid. Any executory agreement hereafter shall be ineffective to
change, modify, or discharge it in whole or in part, unless such executory
agreement is in writing and signed by the party against whom enforcement of the
change, modification, or discharge is sought.
10. USE OF PREMISES. It is Lessee's intention to use or cause the
demised premises to be used for storage and processing of waste products and
anything convenient or desirable in connection therewith, including not by
limitation storage, grinding, and processing of tires and uses normally incident
thereto. Lessee may not use the demised premises for any other business or use
without Lessor's prior written consent, which consent will not be unreasonably
withheld, delayed or conditioned. Lessee shall not use the demised premises in
such a manner as to knowingly violate any law, rule, ordinance, or regulation of
any governmental body having jurisdiction thereof.
11. UNLAWFUL USE PROHIBITED. Lessee shall not use the demised premises
for any unlawful purpose.
12. COVENANT OF QUIET ENJOYMENT. At all times when Lessee is not in
default under this Lease and during any term of this Lease, Lessee's quiet and
peaceable enjoyment of the demised premises shall not be disturbed or interfered
with by Lessor or any person claiming by, through, or under Lessor.
13. MAINTENANCE AND REPAIR. Throughout the term of this Lease, Lessee,
at its sole cost and expense, shall at all times, keep and maintain the demised
premises and each part thereof in as good repair and in as safe order and
condition as at the date of commencement of the term of this Lease, reasonable
wear and tear excepted.
14. CONDEMNATION.
(a) If title to all or part of the demised premises is taken
for any public or quasi-public use under any statute, or if
the demised premises are taken by reason of an order for
immediate possession or by right or eminent domain, or by
private purchase in lieu of eminent domain or if title to so
much of the demised premises is so taken or if the demised
premises are taken by reason of an order for
<PAGE>
immediate possession, and a reasonable amount of
reconstruction of the demised premises will not result in the
demised premises being a practical improvement and reasonably
suitable for Lessee's continued occupancy for the uses and
purposes for which the demised premises are leased, in
Lessee's sole judgment, then in either event Lessee may
terminate this Lease on the date that possession of the
demised premises or part thereof is taken.
(b) If any part of the demised premises shall be so taken and
the remaining part is, in Lessee's sole judgment, reasonably
suitable for Lessee's continued occupancy for the purposes and
uses for which the premises are leased this Lease shall, as to
the part so taken, terminate as of the date that possession of
such part is taken.
(c) In the event that the demised premises or any buildings or
other improvements thereon, or any portion thereof, shall
during the term of this Lease be taken or damaged by eminent
domain or be taken by conveyance by the parties hereto to
avoid or compromise any proceeding in eminent domain, the
total consideration paid in connection with such taking and
damage (including both amounts paid for property taken, loss
of good will, and severance or other damage to such portion of
the demised premises or buildings or improvements thereon as
shall not be taken) shall be equitably apportioned between the
parties as their interests may appear, taking into
consideration the number of years remaining in the primary
term and Renewal Term of this Lease at the date of taking or
damage, ownership of the property taken, and the extent of
severance or other damage to equipment and improvements of
Lessee and Lessor.
15. RIGHT OF ASSIGNMENT. Lessee may not assign, transfer, pledge,
hypothecate, surrender or dispose of this Lease, or any interest herein, or
permit any other person or persons whomsoever to occupy the demised premises
without the written consent of the Lessor being first obtained in writing, which
consent shall not be unreasonably withheld. In the event Lessor agrees to such
assignment, it shall be on the condition that Lessee shall continue to be
personally liable for the performance of all the conditions as set out in this
Lease. This Lease is personal to said Lessee's interests, in whole or in part,
and cannot be sold, assigned, transferred, seized, or taken by operation of law,
or under or by virtue of any execution or legal process, attachment or
proceedings instituted against the Lessee, or under or by virtue of any
bankruptcy or insolvency proceedings had in regard to the Lessee, or in any
other manner, except as mentioned above.
16. SURRENDER. At the expiration of any term of this Lease, unless
renewed as provided for herein, Lessee agrees to quit and surrender possession
of the demised premises to Lessor in as good condition as at the commencement
thereof, excepting reasonable wear and tear, damage by acts of God and the
elements, and the perils actually covered by and compensated for pursuant to a
standard form insurance policy.
17. ARBITRATION. ANY CONTROVERSY WHICH SHALL ALL ARISE BETWEEN LESSOR
AND LESSEE REGARDING THE RIGHTS, DUTIES OR LIABILITIES HEREUNDER OF EITHER PARTY
SHALL BE SETTLED BY
<PAGE>
ARBITRATION. SUCH ARBITRATION SHALL BE BEFORE ONE DISINTERESTED ARBITRATOR IF
ONE CAN BE AGREED UPON, OTHERWISE BEFORE THREE DISINTERESTED ARBITRATORS, ONE
NAMED BY THE LESSOR, ONE BY THE LESSEE, AND ONE BY THE TWO THUS CHOSEN. THE
ARBITRATOR OR ARBITRATORS SHALL DETERMINE THE CONTROVERSY IN ACCORDANCE WITH THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED AS APPLIED TO THE FACTS FOUND
BY HIM OR THEM.
18. ATTORNEY'S FEES. In the event that either party hereto shall
commence any legal action or proceeding including an action for declaratory
relief or a request for arbitration, against the other by reason of the alleged
failure of the other to perform or keep any term, covenant or condition of this
Lease by him to be performed or kept, the party prevailing in said action or
proceeding shall be entitled to recover, in addition to his court costs, a
reasonable attorney's fee to be fixed by the arbitrator(s) or court, and such
recovery shall include court costs and attorney's fees on appeal. As used
herein, "the prevailing party" means the party in whose favor final Judgment is
rendered.
19. ALTERATION, FIXTURES AND IMPROVEMENTS. Lessor hereby acknowledges
and confirms that title to all improvements, fixtures, equipment, and personal
property located on the demised premises at the commencement of this Lease is,
and shall remain, vested in Lessee, and may be altered or removed without the
prior consent of Lessor. No future alterations, additions, improvements and
fixtures, including, but not limited to, trade fixtures, shall become a part of
the demised premises. Trade fixtures as used herein, shall include, but not be
limited to, electrical controls and mechanical equipment used in the process of
waste materials. Lessee shall be permitted to remove all such additions,
improvements, and fixtures from the demised premises at any time during the
thirty (30) days prior to the expiration or sooner termination of this Lease,
and Lessor hereby waives any landlord's lien or other lien, security interest,
or right which may be claimed as security, or to possession or ownership
thereof; provided, however, that Lessor shall have the option to be exercised on
expiration or sooner termination of this Lease to require Lessee to remove any
or all such additions, improvements or fixtures. Any alterations, installation
of fixtures or improvements to the demised premises shall comply with the
requirements of all federal, state and municipal authorities pertaining thereto
and shall not cause any increase in the rental provided to be paid by Lessee
hereunder.
20. FORCE MAJEURE. If either party hereto shall be delayed or prevented
from the performance of any act required hereunder by reason of acts of God,
strikes, lockouts, labor troubles, inability to procure materials, restrictive
governmental laws or regulations or other cause without fault and beyond the
control of the party obligated (financial inability excepted), performance of
such acts shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay; provided, however, nothing in this Paragraph 20 contained
shall excuse Lessee from the prompt payment of any rental or other charge
required of Lessee hereunder except as may be expressly provided elsewhere in
this Lease.
<PAGE>
21. CONDITIONAL LIMITATIONS. Each covenant and agreement of Lessor and
Lessee shall be a condition to the performance of the other's obligation
hereunder, and breach by any party thereof, uncured as provided for herein,
shall be a default.
22. LIENS AND CLAIMS.
(a) Lessee shall not cause to be levied against the demised
premises, or any part thereof, any mechanic's, materialmen's,
contractor's, or subcontractor's liens arising from any claim
for damage growing out of the work of any construction,
repair, restoration, replacement, or improvement, done at the
request of Lessee, and Lessee shall pay or cause to be paid
all of said liens, claims, or demands before any action is
brought to enforce the same against the demised premises;
Lessee agrees to defend, indemnify, and hold Lessor and said
demised premises free and harmless from all liability for any
and all such liens, claims, and demands, together with
reasonable attorney's fees and all costs and expenses in
connection therewith.
(b) Notwithstanding anything to the contrary hereinabove
contained in this Paragraph 22, if Lessee shall, in good
faith, contest the validity of any such lien, claim, or
demand, then Lessee shall, at its expenses, defend itself and
Lessor against the same and shall pay and satisfy any adverse
judgment that may be rendered thereon before the enforcement
thereof against Lessor or the demised premises.
23. LESSOR PAYING CLAIMS. In the event Lessee shall be otherwise
required by this Lease to do so, and after thirty (30) days' written notice
thereof as provided for herein, Lessee shall fail to pay and discharge or cause
to be paid and discharged, when due and payable, any tax, assessment, or other
charge upon or in connection with the demised premises, or any lien or claim for
labor or materials employed or used in, or any claim for damages arising out of
the construction, repair, restoration, replacement, maintenance and use of said
premises, and the improvements thereon, or any judgment or any contested lien or
claim, or any insurance premium expense in connection with said land and
improvements, or any or other claim, charge, or demand which Lessee has agreed
to pay, or cause to be paid under the covenants and conditions of this Lease,
and if Lessee, after thirty (30) days' written notice from Lessor to do so,
shall fail to pay and discharge the same, then Lessor may, at his option, pay
any such tax, assessment, insurance premium or expense, lien, claim, charge or
demand, or settle or discharge any action therefor, or judgment thereon, and all
costs, expenses, and other sums incurred or paid by Lessor in connection with
any of the foregoing shall be paid by Lessee to Lessor upon demand, together
with interest thereon at the rate of 10% per annum from the date paid, and any
default in such repayment shall constitute a breach of the covenants and
conditions of this Lease.
24. DEFAULTS. The occurrence of any one or more of the following
events shall constitute a material default and breach of this Lease by Lessee:
(a) The vacation or abandonment of the demised premises by
Lessee for a period of thirty (30) continuous days.
<PAGE>
(b) The failure by Lessee to make any payment of rent or any
other payment required to be made by Lessee hereunder, as and
when due, and continuation of such failure for a period of ten
(10) days after Lessee's receipt of written notice of such
failure from Lessor.
(c) The failure by Lessee to observe or perform any of the
covenants, conditions, or provisions of this Lease to be
observed or performed by Lessee, other than described in
subparagraph (b) above, and continuation of such failure for a
period of 30 days after Lessee's receipt of written notice
thereof from Lessor to Lessee; provided, however, that if the
nature of Lessee's default is such that more than 30 days are
reasonably required for its cure, then Lessee shall not be
deemed to be in default if Lessee shall commence such cure
within said 30 day period and thereafter diligently prosecute
such cure to completion.
25. REMEDIES OF LESSOR. In the event of any breach of this Lease by
Lessee, and failure to cure during the subject notice and cure periods as
provided herein, then Lessor, in addition to such other rights or remedies
provided to Lessor herein, shall have the immediate right of re-entry and may
remove all persons and property from the demised premises. Such property may be
removed and stored in a public warehouse or elsewhere at the cost of, and for
the account of Lessee. Should Lessor elect to re-enter, as herein provided, or
should he take possession pursuant to legal proceedings or pursuant to any
notice provided for by law, they may EITHER TERMINATE this Lease, or may from
time to time, without terminating this Lease, re-let said premises, or any part
thereof, for such term or terms (which may be for a term extending beyond the
term of this Lease) and at such fair market rental or rentals and upon such
other reasonable terms and conditions as Lessor may deem advisable with the
right to make alterations and repairs to said demised premises. Upon each such
re-letting (a) Lessee shall be immediately liable to pay to Lessor, in addition
to any indebtedness other than rent due hereunder, the cost and expenses of such
re-letting and of such alterations and repairs incurred by Lessor, and the
amount, if any, by which the rent reserved in this Lease for the period of such
re-letting (up to but not beyond the remaining term of any then current Renewal
Term of this Lease) exceeds the amount agreed to be paid as rent for the demised
premises for such period on such re-letting, as such becomes due; or (b) at the
option of Lessor, rents received by Lessor from such re-letting shall be applied
as follows; first, to the payment of any indebtedness other than rent due
hereunder from Lessee to Lessor; second, to the payment of any costs and
expenses of such re-letting and of such alterations and repairs; third, to the
payment of rent due and unpaid hereunder; and the residue, if any, shall be held
by Lessor and applied in payment of future rent as the same may become due and
payable hereunder. If Lessee has been credited with any rent to be received by
such re-letting under option (a) and such rent shall not be promptly paid to
Lessor by the new tenant, or if such rentals received from such re-letting under
option (b) during any month be less than that to be paid during that month by
Lessee hereunder, Lessee shall pay any such deficiency to Lessor. Such
deficiency shall be calculated and paid monthly. No such re-entry or taking
possession of said premises by Lessor shall be construed as an election on
Lessor's part to terminate this Lease unless a written notice of such intention
be given to Lessee or unless the termination thereof be decreed by a court of
competent jurisdiction. Notwithstanding any such re-letting without termination,
Lessor may at any time thereafter elect to terminate this Lease for such uncured
previous breach. Should Lessor at any time terminate this Lease for any uncured
breach, in addition to any other remedy they may have, they may recover from
Lessee all
<PAGE>
damages they may incur by reason of such breach, including the cost of
recovering the demised premises, and including the excess, if any, of the amount
of rent and charges equivalent to rent reserved in this Lease for the remainder
of the then current term, over the then reasonable rental value of the demised
premises for the remainder of such term, all of which amounts shall be due and
payable from Lessee to Lessor as they accrue.
26. HOLDING OVER. Any holding over by Lessee after expiration of
any term hereof, shall be construed as a tenancy from month to month, subject to
all the conditions of this Lease and at the rental rate effective as of the last
month of the term expired. Either party may terminate such month to month
tenancy by giving to the other party 30 days' written notice of its intention to
terminate. The provisions of this Paragraph 26 shall not be deemed a consent on
the part of Lessor of Lessee's continued occupancy after the termination of this
Lease, nor waiver of any of Lessor's rights with respect hereto.
27. TIME OF ESSENCE. Time is of the essence of this Lease, and of
each provision hereof.
28. RIGHTS OF PARTIES. Either Lessor or Lessee may, from time to
time, at their respective option, exercise all rights or remedies which such
party may have at law or in equity, and any consent, waiver, compromise, or
indulgence by one party hereto, of or under any of the provisions of this Lease,
or as to breach or default hereunder by the other party, shall not constitute or
be construed as a waiver of the former party's rights to enforce performance of
the conditions and terms hereof at all other times. Lessee shall permit Lessor
and their agents or representatives to enter the demised premises at all
reasonable times for the purposes of: (i) inspecting the same, or (ii) showing
it to prospective purchasers or mortgagers. Reasonable times shall be construed
to be during Lessee's normal business hours.
29. CONSENTS. It is understood and agreed that the granting of any
consent by Lessor to Lessee to perform any act of Lessee requiring Lessor's
consent under the terms of this Lease, or the failure on the part of Lessor to
object to any such action taken by Lessee without Lessor's consent, shall not be
deemed a waiver by Lessor of their rights to require such consent for any
further similar act by Lessee, and Lessee hereby expressly covenants and
warrants that as to all matters requiring Lessor's consent under the terms of
this Lease, Lessee shall secure such consent for each and every happening of the
event requiring such consent, and shall not claim any waiver on the part of
Lessor of the requirement to secure such consent. Any consent or approval
required hereunder shall not be unreasonably withheld.
30. INSOLVENCY OR RECEIVERSHIP. In the event an involuntary
petition in bankruptcy is filed against Lessee, or if Lessee shall file a
voluntary petition in bankruptcy, or shall institute any proceedings of any kind
or character under any bankruptcy or insolvency law, state or federal, or
institute any proceedings for reorganization under any Chapter of the Federal
Bankruptcy Act in effect at the date hereof, or which may hereafter be enacted
or become effective, wherein and whereby any right of Lessor shall or may be
affected in any degree, or shall be adjudged a bankrupt or insolvent by any
court, or shall make an assignment, general or otherwise, for the benefit of
creditors or appoint any creditor's committee to take over, or if a receiver of
any interest of Lessee in said premises shall be appointed by any court and not
discharged within thirty (30) days thereafter, Lessor may, in any such event, at
his option,
<PAGE>
without notice or demand upon Lessee, or upon any person or persons claiming by,
through or under Lessee, terminate each, every and all of the rights of Lessee
and of any and all person claiming by, through or under Lessee, in and to the
demised premises.
31. OPTION TO EXTEND. Lessee is hereby granted an option to extend
the primary term of this Lease for one consecutive five (5) year renewal term
upon expiration of the initial five year primary term of this Lease, under the
same terms, covenants, and conditions so far as applicable (except as to rent,
which shall be as provided in Paragraph 3 above), and subject to the same
exceptions and reservations as herein contained. This option shall be exercised
by written notice setting forth Lessee's election to exercise the option,
delivered to Lessor, in person, or by United States mail, not less than thirty
(30) days prior to expiration of the primary Lease term; provided, Lessee shall
only be entitled to exercise this option to extend if Lessee is (a) not in
default under this Lease at the time of notice to Lessor by Lessee that Lessee
intends to exercise Lessee's option to extend the Lease period provided in this
paragraph, and (b) not in default at the time the Renewal Term is to commence.
32. INVALIDITY OF CERTAIN PROVISIONS. If any terms or provisions of
this Lease, or the application thereof to any person or circumstances, shall, to
any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such terms or provisions to persons or circumstances other than
that to which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of this Lease shall be valid and be
enforced to the extent permitted by law.
33. BINDING FUTURE PARTIES. Each and all of the terms and
agreements herein contained shall be binding upon and inure to the benefit of
the parties hereto, their heirs, personal and legal representatives, successors,
and assigns.
34. CONSTRUCTION OF WORDS. The masculine gender, singular number,
and present tense, shall be deemed to include the feminine and neuter genders,
the plural number, and the future and past tenses, respectively, and vice-versa,
where the context so requires. The word "mortgage" and reference words thereto
shall also include "deed of trust" and reference words thereto, and vice-versa.
35. PARAGRAPH HEADINGS. Paragraph headings contained herein are for
reference only and are not intended to be part of the agreement, nor to be used
in its interpretation.
36. CONTROLLING LAW. IT IS UNDERSTOOD AND AGREED THAT THIS LEASE IS
ENTERED INTO ON THE BASIS OF THE LAW OF THE STATE OF OREGON, AND THAT LESSOR AND
LESSEE AGREE THAT THIS LEASE AND EACH OF ITS TERMS AND PROVISIONS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF OREGON.
37. PURCHASE OPTION .
(a) For and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and
confessed, Lessor hereby grants to Lessee the sole and
<PAGE>
exclusive option (the "Purchase Option") to purchase the
demised premises for a sum equal to the number of square feet
comprising the demised premises, multiplied by the sum of
$6.00.
(b) This Purchase Option may be exercised by Lessee by
delivery of written notice to Lessor on or before the
expiration date of this Purchase Option. This Purchase Option,
if not sooner exercised, expires five (5) years after the date
hereof.
(c) Upon closing of this Purchase Option, Lessee shall be
entitled to receive from Lessor a general warranty deed
conveying the demised property to Lessee, free and clear of
all liens, mortgages, and encumbrances except as may be
approved in writing by Lessee. The closing shall be held at
the offices of Chicago Title Insurance Company, 10001 S.E.
Sunnyside Rd., Clackamas, Oregon 97015, on a mutually
agreeable date, but not later than the first business day
following the expiration of thirty (30) days after Lessee's
exercise of this Purchase Option.
(d) Within ten (10) days after Lessee's written notice to
Lessor of intention to exercise this Purchase Option, Lessor
shall cause to be delivered to Lessee a title commitment,
issued by the title company, committing to issue an owner's
policy of title insurance to Lessee, in the amount of the
purchase price. Defects in title, if any, as evidenced by such
title commitment, or any survey defects affecting the demised
premises, shall be remedied by Lessor within five (5) days of
written notice to him of such defects; provided, however,
Lessor shall not be obligated to expend any monies to cure
such defects. If any such defects are not cured on or before
the closing date, Lessee, at its sole election, may (i)
terminate this Lease and the Purchase Option, (ii) terminate
this Purchase Option, and continue with the terms of this
Lease as if this Purchase Option had not been exercised
(provided, if Lessee's time period to exercise the Renewal
Term has expired, Lessee shall have an additional thirty (30)
days after its termination of this Purchase Option to exercise
the Renewal Term), or (iii) waive such defect and close the
Purchase Option.
(e) At such closing, the purchase price shall be paid to
Lessor in cash, and Lessor shall deliver said deed, and an
owner's policy of title insurance in the amount of the
purchase price, at Lessor's sole cost and expense. Prepaid
rentals and ad valorem taxes shall be prorated as of the
closing date. All other closing costs shal1 be paid by such
party customarily paying such closing costs in Multnomah
County, Oregon. Pending the closing of the purchase, Lessee
shall pay rent as provided in Paragraph 3 above.
(f) If this Purchase Option has not been exercised prior to
that date which is five (5) years after the date of this
Lease, this Purchase Option shall automatically terminate.
Should Lessee exercise this Purchase Option and fail to close
for reasons not the fault of Lessor or not due to a title or
survey defect, Lessor may specifically enforce Lessee's
obligation to purchase, or seek such other remedies as may be
available at law or in equity. If Lessee shall exercise the
Purchase
<PAGE>
Option and Lessor shall fail to close said transaction for
reason not the fault of Lessee, Lessee may enforce specific
performance of this purchase option, or seek such other
remedies as may be available to Lessor at law or in equity.
38. FINAL AGREEMENT. THIS LEASE REPRESENTS A FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE MATTERS CONTAINED HEREIN AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
39. ENVIRONMENTAL MATTERS. Lessee shall conduct its operations at
the demised premises in accordance with applicable environmental laws and
regulations. In the event that any hazardous substances or materials are
released into the environment as a result of Lessee's operations, Lessee shall
promptly clean up the release at its expense and in accordance with applicable
laws and regulations. Lessee agrees to indemnify, defend and hold Lessor
harmless from and against any and all losses, liabilities, claims, costs and
expenses (including reasonable attorney fees) arising out of or in any way
related to Lessee's failure to perform its obligations under this paragraph 39.
The term "hazardous substance or material" as used herein shall include, without
limitation, petroleum, PCBs, asbestos and any substance or material of any kind
or nature whatsoever that is defined as hazardous or toxic by any applicable
federal, state, or local statute, rule, regulation or ordinance.
IN WITNESS WHEREOF, this Lease has been executed as of the date first
set forth above.
LESSOR: EEEK Limited Partnership LESSEE: RB Recycling, Inc.
By:
-------------------------------------- By:
Wayne J. Easley, General Partner ----------------------------
Title:-------------------------
<PAGE>
EXHIBIT 10.3
LEASE OF REAL PROPERTY
THIS LEASE is made and entered into effective the 1st day of
February, 1999, by and between ARLENE GLANZ, owner of the demised premises
("Lessor"), and RB RECYCLING, INC., an Oregon corporation ("Lessee"), acting
through its duly authorized officer.
1. PREMISES. The premises leased to Lessee, together with
appurtenances, are herein referred to as the "demised premises" and are situated
in the City of Portland, County of Multnomah, State of Oregon, the legal
description hereof being as follows:
Lots 11 through 18 and Lots 27 through 36, Block 5, Swinton
Addition, Portland, Multnomah County, Oregon. Lots 11 through
18, commonly known as 643 N. Argyle and also known as 8501 N.
Borthwick, Portland, Oregon, and Lots 27 through 36 being
located on N. Hunt Street, Portland, Multnomah County, Oregon
(all of said described property being contiguous and being
45,000 square feet (+/-).
2. TERM. The primary term of this lease shall be for five (5) years
commencing on the 1st day of February, 1999, and ending on the 31st day of
January, 2004, subject to one consecutive five (5) year renewal term (the
"Renewal Term") thereafter at Lessee's option as provided for herein.
3. RENT.
(a) PRIMARY TERM. Lessee agrees to pay the Lessor during the
primary term of this Lease, as rent for the use and occupancy of the
demised premises, the following (which amounts consist of first year
rental of $3,200 increased by five percent (5%) per year rounded up to
the nearest dollar):
(i) During the first year of the primary term of this lease
monthly rent shall be the sum of $3,200 per month.
(ii) During the second year of the primary term of this lease
monthly rent shall be the sum of $3,360 per month.
(iii) During the third year of the primary term of this lease
monthly rent shall be the sum of $3,528 per month.
(iv) During the fourth year of the primary term of this lease
monthly rent shall be the sum of $3,705 per month.
(v) During the fifth year of the primary term of this lease
monthly rent shall be the sum of $3,890 per month.
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Rent shall be payable monthly in advance, on the first day of each
calendar month throughout the primary term of this Lease, and during the Renewal
Term. All rent shall be paid in lawful money of the United States and without
prior notice or demand.
(b) RENEWAL TERM. Upon election of the Lessee to exercise its
option to renew this Lease for the Renewal Term, as set forth in Paragraph 35
below, the monthly rent for each month during the Renewal Term shall be as
follows:
(i) During the first year of the Renewal Term of this lease
monthly rent shall be the sum of $4,085 per month.
(ii) During the second year of the Renewal Term of this lease
monthly rent shall be the sum of $4,289 per month.
(iii) During the third year of the Renewal Term of this lease
monthly rent shall be the sum of $4,503 per month.
(iv) During the fourth year of the Renewal Term of this lease
monthly rent shall be the sum of $4,728 per month.
(v) During the fifth year of the Renewal Term of this lease
monthly rent shall be the sum of $4,965 per month.
4. LESSEE'S ACCEPTANCE OF LEASE. Lessee accepts said letting and agrees
to pay to the order of the Lessor the rentals above stated for the primary term
of this lease and for the Renewal Term, in advance, at the time and in the
manner aforesaid.
Lessee hereby acknowledges that the Lessor has not made and does not
make any representations as to the physical condition of the leased premises.
Lessee further acknowledges that it has made an independent inspection
of the physical condition of same and all parts thereof and accepts said
premises "AS IS."
5. TAXES.
(a) In addition to the rentals above provided, Lessee shall during
any lease term, pay and discharge upon, prior to the delinquency
date thereof, all real and personal property taxes levied by any
public agency authorized to levy such taxes, including all existing
assessments against the property which are made for the purpose of
paying for improvements, such as, without limitation, street sewers
and water pipes. Lessor shall provide Lessee with the tax statements
for all real property taxes assessed against the demised premises
and Lessee shall pay such taxes directly, providing Lessor with a
copy of the submitted tax statement and check as proof of payment.
(b) All such general taxes and existing L.I.D. assessments on the
demised premises from the first year shall be prorated between
Lessor and Lessee from the commencement of the term of this lease.
Such taxes For the last year of the
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primary term (or the Renewal Term) of this lease shall be prorated
between Lessor and Lessee through the last day of the primary term
(or the Renewal Term) of this lease. All such taxes shall be
prorated on the basis of a tax fiscal year commencing July 1 and
ending July 30.
(c) If Lessee shall, in good faith, contest such tax on the demised
premises, then Lessee may, at its expense, defend itself and Lessor
against the same and shall pay and satisfy any judgment, including
all penalties and interest that may be rendered thereon; provided,
however, Lessor may require Lessee to furnish to Lessor a surety
bond or other security satisfactory to Lessor in an amount equal to
such contested tax, indemnifying Lessor against liability for such
tax and holding the demised premises free from the effect of such
tax.
6. INSURANCE.
(A) LIABILITY INSURANCE. Lessee shall, at all times during any term
of this lease, carry and maintain a policy of broad form
comprehensive public liability insurance policies in form and with
an insurer licensed to do business in the State of Oregon, by the
terms of which Lessor and Lessee are named as insureds and shall be
indemnified against liability for any damage to the property or
bodily injury, including death, of any person entering on or using
the demised premises, or any structure thereon, or any part thereof.
Such insurance policy or policies shall be maintained in the minimum
coverage amounts of Five Hundred Thousand Dollars ($500,000.00) for
bodily injury to, or death of, one person, and One Million Dollars
($1,000,000.00) for bodily injury or death in any one occurrence.
Such insurance shall be stated to be primary and noncontributing
with any other insurance available for the protection of Lessor, and
shall contain a provision that Lessor, although named as an insured,
shall nevertheless be entitled to recover under said policy for any
loss, injury or damages to Lessor, his agents and employees, or to
the property of said persons, by result of the negligence of Lessee.
(B) CERTIFICATES OF INSURANCE. All policies of insurance procured
and maintained by Lessee hereunder shall be issued in the names of
Lessor and Lessee, and for the mutual and joint benefit and
protection of both parties. Executed copies of such policy or
policies of insurance or certificate thereof, shall be delivered to
Lessor, and all such policies shall contain a provision that not
less than ten (10) days' written notice shall be given to Lessor
prior to the cancellation, reduction of coverage, or any material
change in such policy.
7. UTILITIES. Lessee shall pay all charges for water, sewage, gas,
electricity, telephone, trash collection, and other like services used by Lessee
or any licensee, agent or other person occupying or using the demised premises.
8. PAYMENTS AND NOTICES. All rents and other sums payable by Lessee
to Lessor hereunder shall be paid to Lessor at the address herein, or at such
other place as Lessor may hereafter designate in writing and deliver to Lessee.
Any notice to be given by either of the parties
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<PAGE>
hereto to the other hereunder may be delivered in person to Lessor or to Lessee
or may be deposited in the United States mail duly registered or certified, with
postage prepaid, and addressed to the party for whom intended, as follows:
If to Lessee: If to Lessor:
RB Recycling, Inc. Arlene Glanz
8051 North Borthwick 7485 SW Kimberly Court
Portland, Oregon 97217 Beaverton, Oregon 97008
Attn: Plant Manager
With copy to:
RB Rubber Products, Inc.
904 E 10th Avenue
McMinnville, Oregon 97128
Attn: Paul Gilson
or at such other address as either of the parties hereto may thereafter
designate in writing. Service of any such written notice shall be deemed
complete at the time of such personal delivery or upon five days after the
mailing thereof as hereinabove provided.
9. ENTIRE AGREEMENT. This lease contains the entire agreement of the
parties hereto with respect to the matters covered hereby, and no other
agreement, statement, or promise made by any party hereto, or to any employee,
officer, or agent of any party hereto, which is not contained herein, shall be
binding or valid.
10. USE OF PREMISES. It is Lessee's intention to use or cause the
demised premises to be used for storage and processing of waste products and
anything convenient or desirable in connection therewith, including not by
limitation storage, grinding, and processing of tires, woody wastes, and related
or similar items, and for uses normally incident thereto. Lessee may use the
premises for any other lawful business as Lessee may from time to time deem
advisable. Lessee shall not use the premises in such a manner as to knowingly
violate any law, rule, ordinance, or regulation of any governmental body having
jurisdiction thereof.
11. UNLAWFUL USE PROHIBITED. Lessee shall not use the demised
premises for any unlawful purpose.
12. COVENANT OF QUIET ENJOYMENT. At all times when Lessee is not in
default under this lease and during any term of this lease, Lessee's quiet and
peaceable enjoyment of the premises shall not be disturbed or interfered with by
Lessor or any person claiming by, through, or under Lessor.
13. LESSOR'S NON-LIABILITY. Lessor shall not be liable for any loss,
damage or injury of any kind whatsoever to any person or property arising from
any use of the demised premises, or any part thereof, or caused by any defect in
any building, structure, or other improvement thereon or in any equipment or
other facility therein; or caused by or arising from any act or omission of
Lessee, or of its agent, employees, licensees, or invitees, or by or from
4
<PAGE>
any accident on said premises or any fire or other casualty thereon, or
occasioned by the failure of Lessee to maintain said premises and improvements
thereto in safe condition, or arising from any surface, subsurface, or soil
condition, or from any other cause whatsoever; and Lessee, as a material part of
the consideration of this lease, hereby waives on its behalf, all claims and
demands against Lessor for any such loss, damage, or injury of Lessee and hereby
agrees to indemnify and hold Lessor entirely free and harmless from all
liability for any such loss, damage, or injury to other persons and from all
costs and expenses arising therefrom.
14. MAINTENANCE AND REPAIR. Throughout the term of this lease,
Lessee, at its sole cost and expense, shall at all times, keep and maintain the
demised premises and each part thereof in as good repair and in as safe order
and condition as at the date of commencement of the term of this lease. Lessee
thereafter assumes full responsibility; for the condition, operation, repair
maintenance, during any term of this lease, of the premises, except structural
failures not attributable to Lessee's use of premises.
15. CONDEMNATION.
(a) If title to all or part of the demised premises is taken for any
public or quasi-public use under any statute, or if the demised
premises are taken by reason of an order for immediate possession or
by right or eminent domain, or by private purchase in lieu of
eminent domain or if title to so much of the demised premises is so
taken or if the demised premises are taken by reason of an order for
immediate possession, and a reasonable amount of reconstruction of
the demised premises will not result in the demised premises being a
practical improvement and reasonably suitable for Lessee's in
Lessee's sole judgment continued occupancy for the uses and purposes
for which the demised premises are leased, then in either event this
lease shall terminate on the date that possession of the demised
premises or part thereof is taken.
(b) If any part of the demised premises shall be so taken and the
remaining part is, in Lessee's sole judgment, reasonably suitable
for Lessee's continued occupancy for the purposes and uses for which
the premises are leased, this lease shall, as to the part so taken,
terminate as of the date that possession of such part is taken.
(c) In the event that the demised premises or any buildings or other
improvements thereon or any portion of any thereof shall during the
term of this lease be taken or damaged by eminent domain or be taken
by conveyance by the parties hereto to avoid or compromise any
proceeding in eminent domain, the total consideration paid in
connection with such taking, and damage (including both amounts paid
for property taken, loss of good will, and severance or other damage
to such portion of the demised premises or buildings or improvements
thereon as shall not be taken) shall be equitably apportioned
between the parties as their interests may appear, taking into
consideration the number of years remaining in the Renewal Term of
this lease at the date of taking or damage, and the extent of
severance or other damage to equipment and improvement of Lessee and
Lessor.
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<PAGE>
16. RIGHT OF ASSIGNMENT. Lessee may not assign, transfer, pledge,
hypothecate, surrender or dispose of this lease, or any interest herein, or
permit any other person or person whomsoever to occupy the demised premised
without the written consent of the Lessor being first obtained in writing, which
consent shall not be unreasonably withheld; that in the event Lessor agrees to
such assignment, it shall be on the condition that Lessee shall continue to be
personally liable for the performance of all the condition as set out in this
lease; this lease is personal to said Lessee's interest, in whole or in part,
cannot be sold, assigned, transferred, seized, or taken by operation of law, or
under or by virtue of any execution or legal process, attachment or proceedings
instituted against the Lessee, or under or by virtue of any bankruptcy or
insolvency proceedings had in regard to the Lessee, or in any other manner,
except as mentioned above.
17. MODIFICATION OF LEASE. This lease contains the entire agreement
between the parties, and any executory agreement hereafter shall be ineffective
to change, modify, or discharge it in whole or in part, unless such executory
agreement is in writing and signed by the party against whom enforcement of the
change, modification, or discharge is sought.
18. SURRENDER. At the expiration of any term of this lease, unless
renewed as provided for herein, Lessee agrees to quit and surrender possession
of the demised premises to Lessor in as good condition as at the commencement
thereof, excepting reasonable wear and tear, damage by acts of God and the
elements, and the perils actually covered by and compensated for pursuant to a
standard for insurance policy.
19. ARBITRATION. ANY CONTROVERSY WHICH SHALL ALL ARISE BETWEEN
LESSOR AND LESSEE REGARDING THE RIGHTS, DUTIES OR LIABILITIES HEREUNDER OF
EITHER PARTY SHALL BE SETTLED BY ARBITRATION. SUCH ARBITRATION SHALL BE BEFORE
ONE DISINTERESTED ARBITRATOR IF ONE CAN BE AGREED UPON, OTHERWISE BEFORE THREE
DISINTERESTED ARBITRATORS, ONE NAMED BY THE LESSOR, ONE BY THE LESSEE, AND ONE
BY THE TWO THUS CH0SEN. THE ARBITRATOR OR ARBITRATORS SHALL DETERMINE THE
CONTROVERSY IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS
LOCATED AS APPLIED TO THE FACTS FOUND BY HIM OR THEM.
20. ATTORNEY'S FEES. In the event that either party hereto shall
commence any legal action or proceeding including an action for declaratory
relief or a request for arbitration, against the other by reason of the alleged
failure of the other to perform or keep any term, covenant or condition of this
lease by him to be performed or kept, the party prevailing in said action or
proceeding shall be entitled to recover, in addition to his court costs, a
reasonable attorney's fee to be fixed by the arbitrator(s) or court, and such
recovery shall include court costs and attorney's fees on appeal. As used
herein, "the prevailing party" means the party in whose favor final judgment is
rendered.
21. ALTERATION, FIXTURES AND IMPROVEMENTS. Save and except as to
alterations and improvements to Lessee's existing tire and woody waste
processing and shop facilities, Lessee shall not alter or improve the demised
premises without the prior written consent of Lessor to do so (which consent
will not be unreasonably withheld); no such
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<PAGE>
alterations, additions, improvements and fixtures, including but not limited to
trade fixtures, shall become a part of the demised premises; trade fixtures as
used herein, shall include, but not be limited to, electrical controls and
mechanical equipment used in the processing of waste materials; Lessee shall be
permitted to remove all such additions, improvements, and fixtures from the
leased premises at any time during the terms hereof or within ninety (90) days
after expiration or sooner termination of his lease, and Lessor hereby waives
any landlord's lien or other lien, security interest, or right which may be
claimed as security, or to possession or ownership thereof, provided, however
that such removal can be effected without injury to the leased premises and
provided further that any such fixture shall not have become, by the manner in
which it is affixed, an integral part of the leased premises made or placed in
or on said premises shall on expiration or sooner termination of this lease
belong to Lessor without compensation to Lessee; provided, however, that Lessor
shall have the option to be exercised on expiration or sooner termination of
this lease to require Lessee to remove any or all such additions, improvements
or fixtures. Any alterations, installation of fixtures or improvements to the
demised premises shall comply with the requirements of all federal, state and
municipal authorities pertaining thereto and shall not cause any increase in the
rental provided to be paid by Lessee hereunder.
22. FIXTURES AND EQUIPMENT. Lessee agrees that there are fixtures
and equipment in the buildings on the demised premises existing at the date of
commencement of this lease, which have always been the property solely of
Lessor, including the air compressor and pump. The Lessee has the right to use
said fixtures and equipment. Lessee accepts said fixtures and equipment in their
present condition and without any warranties or representations by Lessor as to
their present condition, and Lessee hereby agrees to maintain said fixtures and
equipment and make whatever repairs are reasonably necessary for their continued
use, without any expense to Lessor, and at the termination of this lease, said
equipment and fixtures shall be returned to the Lessor in as good condition as
when received by Lessee, natural wear and depreciation being excepted. Lessee is
hereby given the right to replace any such equipment which shall wear out or
cease to function, provided, however, that said replacing equipment shall be of
an equal value to the replaced equipment as at the time of replacement, and
shall thereafter be in place and stead of the replaced equipment, and the right
and title thereto shall belong to the Lessor under this lease. Lessee is hereby
given the right to change the location of said fixtures and equipment, provided
that said moving does not damage the demised premises, and provided further that
at the termination of this lease, or any extensions hereof, that said fixtures
and equipment will be returned to the original location thereof.
23. FORCE MAJEURE. If either party hereto shall be delayed or
prevented from the performance of any act required hereunder by reason of acts
of God, strikes, lockouts, labor troubles, inability to procure materials,
restrictive governmental laws or regulations or other cause without fault and
beyond the control of the party obligated (financial inability excepted),
performance of such acts shall be excused for the period of the delay and the
period for the performance of any such act shall be extended for a period
equivalent to the period of such delay; provided, however, nothing in this
paragraph 23contained shall excuse Lessee from the prompt payment of any rental
or other charge required of Lessee hereunder except as may be expressly provided
elsewhere in :this lease.
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24. CONDITIONAL LIMITATIONS. Each covenant and agreement of Lessor
and Lessee shall be a condition to the performance of the other's obligation
hereunder, and breach by any party thereof, uncured as provided for herein,
shall be in default.
25. LIENS AND CLAIMS.
(a) Lessee shall not cause to be levied against the demised
premises, or any part thereof, any mechanic's, materialmen's
contractor's, or subcontractor's liens arising from any claim
for damage growing out of the work of any construction,
repair, restoration, replacement, or improvement, done at the
request of Lessee, and Lessee shall pay or cause to be paid
all of said liens, claims, or demands before any action is
brought to enforce the same against the demised premises;
Lessee agrees to defend, indemnify, and hold Lessor and said
premises free and harmless from all liability for any and all
such liens, claims, and demands, together with reasonable
attorney's fees and all costs and expenses in connection
therewith.
(b) Notwithstanding anything to the contrary hereinabove
contained in this Paragraph 25, if Lessee shall, in good
faith, contest the validity of any such lien, claim, or
demand, then Lessee shall, at its expenses, defend itself and
Lessor against the same and shall pay and satisfy any adverse
judgment that may be rendered thereon before the enforcement
thereof against Lessor or the leased premises.
26. LESSOR PAYING CLAIMS. In the event Lessee shall be otherwise
required by this lease to do so, and after thirty (30) days written notice
thereof as provided for herein, Lessee shall fail to pay and discharge or cause
to be paid and discharged, when due and payable, any tax, assessment, or other
charge upon or in connection with the leased premises, or any lien or claim for
labor or materials employed or used in, or any claim for damages arising out of
the construction, repair, restoration, replacement, maintenance and use of said
premises, and the improvements thereon, or any judgment or any contested lien or
claim, or any insurance premium expense in connection with said land and
improvements, or any or other claim, charge, or demand which Lessee has agreed
to pay, or cause to be paid under the covenants and conditions of this lease,
and if Lessee, after thirty (30) days' written notice from Lessor to do so,
shall fail to pay and discharge the same, then Lessor may, at his option, pay
any such tax, assessment, insurance premium or expense, lien claim, charge or
demand, or settle or discharge any action therefor, or judgment thereon, and all
costs, expenses, and other sums incurred or paid by Lessor in connection with
any of the foregoing shall be paid by Lessee to Lessor upon demand, together
with interest thereon at the rate of 10% per annum from the date paid, and any
default in such repayment shall constitute a breach of the covenants and
conditions of this lease.
27. DEFAULTS. The occurrence of any one or more of the following
events shall constitute a material default and breach of this lease by Lessee:
(a) The vacation or abandonment of the demised premises by
Lessee for a period of sixty (60) continuous days.
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(b) The failure by Lessee to make any payment of rent or any
other payment required to be made by Lessee hereunder, as and
when due.
(c) The failure by Lessee to observe or perform any of the
covenants, conditions, or provisions of this lease to be
observed or performed by Lessee, other than described in
subparagraph (b) above, where such failure shall continue for
a period of 30 days after written notice thereof from Lessor
to Lessee; provided, however, that if the nature of Lessee's
default is such that more than 30 days are reasonably
required for its cure, then Lessee shall not be deemed to be
in default if Lessee shall commence such cure within said 30
day period and thereafter diligently prosecute such cure to
completion.
28. REMEDIES OF LESSOR. In the event of any breach of this lease by
Lessee, and failure to cure as provided for herein, then Lessor, after ten (10)
days written notice to Lessee besides other rights or remedies Lessor may have,
Lessor shall have the immediate right of re-entry and may remove all persons and
property from the demised premises. Such property may be removed and stored in a
public warehouse or elsewhere at the cost of, and for the account of Lessee.
Should Lessor elect to re-enter, as herein provided, or should he take
possession pursuant to legal proceedings or pursuant to any notice provided for
by law, she may either terminate this lease, or may from time to time, without
terminating this lease, re-let said premises, or any part thereof, for such term
or terms (which may be for a term extending beyond the term of this lease) and
at such fair market rental or rentals and upon such other reasonable terms and
conditions as Lessor may deem advisable with the right to make alterations and
repairs to said premises. Upon each such re-letting (a) Lessee shall be
immediately liable to Lessor, in addition to indebtedness other than rent due
hereunder, for the cost and expenses of such re-letting and of such alterations
and repairs incurred by Lessor, and the amount if any, by which the rent
reserved in this lease for the period of such re-letting (up to but not beyond
the remaining term of any then current renewal term of this lease) exceeds the
amount agreed to be paid as rent for the demised premises for such period on
such re-letting, as such becomes due; or (b) at the option of Lessor, rents
received by Lessor from such re-letting shall be applied as follows; first, to
the payment of any indebtedness other than rent due hereunder from Lessee to
Lessor; second, to the payment of any costs and expenses of such re-letting and
of such alterations and repairs; third, to the payment of rent due and unpaid
hereunder; and the residue, if any, shall be held by Lessor and applied in
payment of future rent as the same may become due and payable hereunder. If
Lessee has been credited with any rent to be received by such re-letting under
option (a) and such rent shall not be promptly paid to Lessor by the new tenant,
or if such rentals received from such re-letting under option (b) during any
month be less than that to be paid during that month by Lessee hereunder, Lessee
shall pay such deficiency to Lessor. Such deficiency shall be calculated and
paid monthly. No such re-entry or taking possession of said premised by Lessor
shall be construed as an election on Lessor's part to terminate this lease
unless a written notice of such intention be given to Lessee or unless the
termination thereof decreed by a court of competent jurisdiction.
Notwithstanding any such re-letting without termination, Lessor may at any time
thereafter elect to terminate this lease for such uncured previous breach.
Should Lessor at any time terminate this lease for any uncured breach, in
addition to any other remedy they may have, they may recover from Lessee all
damages they may incur by reason of such breach, including the cost of damages
they may incur by reason of such breach, including the cost of recovering the
demised premises, and including
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the excess, if any, of the amount of rent and charges equivalent to rent
reserved in this lease for the remainder of the then current premises for the
remainder of such term, all of which amounts shall be due and payable from
Lessee to Lessor as they accrue.
29. HOLDING OVER. Any holding over by Lessee after expiration of any
term hereof, shall be construed as a tenancy from month to month, subject to all
the conditions of this lease and at the rental rate effective as of the last
month of the term expired. Either party may terminate such month to month
tenancy by giving to the other party 30 days' written notice -of its intention
to terminate. The provisions of this paragraph 29 shall not be deemed a consent
on the part of Lessor of Lessee's continued occupancy after the termination of
this lease, nor waiver of any of Lessor's rights with respect hereto.
30. TIME OF ESSENCE. Time is of the essence of this lease, and of
each provision.
31. RIGHTS OF PARTIES. Either Lessor or Lessee may, from time to
time, at their respective option, exercise all rights or remedies which such
party may have at law or in equity, and any consent, waiver, compromise, or
indulgence by one party hereto, of or under any of the provisions of this lease,
or as to breach or default hereunder by the other party, shall not constitute or
be construed as a waiver of the former party's rights to enforce performance of
the conditions and terms hereof at all other times. Lessee shall permit Lessor
and their agents or representatives to enter the demised premises at all
reasonable times for the purposes of: (i) inspecting the same; or (ii) showing
it to prospective purchasers or mortgagors. Reasonable times shall be construed
to be during Lessee's normal business hours.
32. CONSENTS. Any consent or approval required hereunder will not be
unreasonably withheld.
33. INSOLVENCY OR RECEIVERSHIP. In the event an involuntary
petition in bankruptcy is filed against Lessee, or if Lessee shall file a
voluntary petition in bankruptcy, or shall institute any proceedings of any
kind or character under any bankruptcy or insolvency law, state or federal,
or institute any proceedings for reorganization under any Chapter of the
Federal Bankruptcy Act in effect at the date hereof, or which may hereafter
be enacted or become effective, wherein and whereby any right of Lessor shall
or may be affected in any degree, or shall be adjudged a bankrupt or
insolvent by any court, or shall make an assignment, general or otherwise,
for the benefit of creditors or appoint any creditor's committee to take
over, or if a receiver of any interest of Lessee in said premises shall be
appointed by any court and not discharged within thirty (30) days thereafter,
Lessor may, in any such event, at his option, without notice or demand upon
Lessee, or upon any person or persons claiming by, through or under Lessee,
terminate each, every and all of the rights of Lessee and of any and all
person claiming by, through or under Lessee, in and to the demised premises
34. OPTION TO EXTEND (RENEW). Lessee is hereby granted an option to
extend the term of this lease for one consecutive five (5) year renewal term
upon expiration of the initial five year primary term of this lease, under the
same terms, covenants, and conditions so far as applicable (except as to rent,
as provided in Paragraph 2 above), and subject to the same exceptions and
reservations as herein contained. This option shall be exercised by written
notice setting forth Lessee's election to exercise the option, delivered to
Lessor, in person, or by United
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States mail, not less than one hundred fifty (150) days prior to expiration of
the primary lease term; provided, Lessee is (a) in good standing with the Lessor
with respect to all of the articles and conditions of this Lease, at the time of
notice to Lessor by Lessee that Lessee intends to exercise Lessee's option to
extend the Lease period provided in this paragraph, and (b) still in good
standing at the time the lease extension would begin.
35. RIGHT OF FIRST REFUSAL. If Lessor shall receive a bona fide
third party offer (a "Third Party Offer") for the purchase of all or any part of
the demised premises (the "Sale Property") during the term of this lease
(including any renewals hereof), and the Third Party Offer shall be acceptable
to Lessor, in Lessor's sole and absolute discretion, Lessor shall give Lessee
the right to purchase the Sale Property (but not any other portion of the
demised premises not covered by the Third Party Offer) at the price and on the
terms and conditions of the Third Party Offer. This right of first refusal shall
be extended to Lessee by Lessor giving Lessee written notice of the Third Party
Offer, offering to sell the Sale Property to Lessee on the same terms and
conditions as the Third Party Offer ("Lessor's Offer"), and requiring Lessee to
accept Lessor's Offer in writing, within twenty (20) days after Lessee's receipt
of such notice. If Lessee fails to accept Lessor's offer within said twenty (20)
day period, Lessor shall have the right to accept the Third Party Offer, and
convey the Sale Property to said third party under the Third Party Offer,
subject to Lessee's rights under this lease. No sale of the demised premises to
a third party shall terminate this lease or otherwise affect Lessee's rights
under this lease.
36. INVALIDITY OF CERTAIN PROVISIONS. If any terms or provisions of
this lease, or the application thereof to any person or circumstances, shall, to
any extent, be invalid or unenforceable, the remainder of this lease, or the
application of such terms or provisions to persons or circumstances other than
that to which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of this lease shall be valid and be
enforced to the extent permitted by law.
37. BINDING FUTURE PARTIES. Each and all of the terms and
agreements herein contained shall be binding upon and inure to the benefit of
the parties hereto, their heirs, personal and legal representatives,
successors, and assigns.
38. CONSTRUCTION OF WORDS. The masculine gender, singular number,
and present tense, shall be deemed to include the feminine and neuter
genders, the plural number, and the future and past tenses, respectively, and
vice-versa, where the context so requires. The word "mortgage" and reference
words thereto shall also include "deed of trust" and reference words thereto,
and vice versa.
39. PARAGRAPH HEADINGS. Paragraph headings contained herein are for
reference only and are not intended to be part of the agreement, nor to be used
in its interpretation.
40. CONTROLLING LAW. IT IS UNDERSTOOD AND AGREED THAT THIS LEASE IS
ENTERED INTO ON THE BASIS OF THE LAW OF THE STATE OF OREGON, AND THAT LESSOR AND
LESSEE AGREE THAT THIS LEASE AND EACH OF ITS TERMS AND PROVISIONS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF OREGON.
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41. PAVING ASSESSMENT. Lessee agrees to pay during the term of this
lease all sums assessed against the demised premises, in respect of an existing
current paving assessment. Lessor will provide Lessee with payment-due notices
thereunder as received and Lessee will have thirty (30) days thereafter in which
to make such annual payment.
42. INVENTORY. Lessee agrees to limit inventory to 6,000 tons unless
inventory is controlled by a legitimate, bona fide purchase order from a listed
New York Stock Exchange company but in no event will inventory exceed 9,000
tons.
44. ENVIRONMENTAL MATTERS. Lessee shall conduct its operations at
the demised premises in accordance with applicable environmental laws and
regulations. In the event that any hazardous substances or materials are
released into the environment as a result of Lessee's operations, Lessee shall
promptly clean up the release at its expense and in accordance with applicable
laws and regulations. Lessee agrees to indemnify, defend and hold Lessor
harmless from and against any and all losses, liabilities, claims, costs and
expenses (including reasonable attorney fees) arising out of or in any way
related to Lessee's failure to perform its obligations under this paragraph 44.
Lessor agrees to indemnify, defend and hold Lessee harmless from and against any
and all losses, liabilities, claims, costs and expenses (including reasonable
attorney fees) arising out of or resulting from the release of any hazardous
substance or material on the demised premises prior to effective date first
stated above. The term "hazardous substance or material" as used herein shall
include, without limitation, petroleum, PCBs, asbestos and any substance or
material of any kind or nature whatsoever that is defined as hazardous or toxic
by any applicable federal, state, or local statute, rule, regulation or
ordinance.
LESSOR LESSEE:
RB Recycling, Inc.
By:
-----------------------------
Arlene Glanz Title:
---------------------------
IN THE STATE OF OREGON )
)
COUNTY OF MULTNOMAH )
BEFORE ME, the undersigned authority, on this day personally appeared
ARLENE GLANZ, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this ____ day of __________,
1999.
---------------------------
Notary Public in and for
Multnomah County, Oregon
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My Commission Expires: Printed Name of Notary:
- ------------------------------ ------------------------------
IN THE STATE OF OREGON )
)
COUNTY OF _____________ )
BEFORE ME, the undersigned authority, on this day personally appeared
_________ _________________, President of RB Recycling, Inc., known to me to be
the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed, in the capacity therein stated, and as the act and deed of
said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this ____ day of __________
1999.
-----------------------------
Notary Public in and for
Multnomah County, Oregon
My Commission Expires: Printed Name of Notary:
- ------------------------------ ------------------------------
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